Update on PenFed CDs for January - New and Rollover CDs

There was disappointment and confusion when PenFed canceled its CD Rollover Subscription Promotion last week. According to my PenFed contact, the canceling was due to an IT issue rather than high demand. Consequently, they have a new rollover certificate promotion that's just as good as before. Unfortunately, if you don't have PenFed CDs that mature in January, you won't be able to participate. However, there's good news regarding the regular January CD rates. Here are the details that I received of the new rollover promotion:

• The current Rollover Certificate promotion is for existing PenFed Money Market and IRA certificates that are due to mature in January 2010 AND the member elects to rollover.
• The former Certificate Reservation program only included 3, 5 and 7 year certificates. The new promotion includes 3, 4, 5 and 7 year certificates.
• With the former Reservation program, members secured the following yields: 3 yr/3.50%, 5 yr/4:00% and 7 yr/4.25%. **The new Rollover Certificate promotion will yield the following (which includes the 0.25% bonus): 3yr yields 3.50%, 4 yr yields 3.75%, 5 yr yields 4.00% and 7 yr yields 4.25%.
• All members who participated in the Certificate Reservation program will have their reservations honored and they will receive the advertised rate.
• If a member has a PenFed Money Market or IRA certificates that is due to mature in January and wishes to call PenFed and confirm the rates for the Rollover promotion, they may do so as our representatives have been provided with the January's 2010 certificate rates.
• A member with a maturing certificate in January may participate in the promotion by accessing their accounts via PenFed Online. On PenFed Online, the member can locate their certificate(s) and elect to have the certificate "rollover" at maturity. They may also contact a member service representative to assist them with the rollover election.

I also called member services (800-247-5626), and the rep was aware of the above rollover rates for January.

One thing to note is that these rollover rates include a 0.25% bonus. Thus, there should be a nice bump-up in the non-rollover rates for the 3-, 4- and 5-year CDs. The regular January CD rates should be the following:

• 3.25% APY 3 year
• 3.50% APY 4 year
• 3.75% APY 5 year
• 4.00% APY 7 year

The 7-year remains at 4%, but the 3-, 4- and 5-year CD rates are 0.75% higher than what they are now. These are very competitive compared to long-term CDs at other institutions.

For more details about PenFed's CDs and joining PenFed, please refer to this PenFed review post. Details of the CDs are available in the second page of PenFed's account application.

Membership

PenFed makes it easy for anyone to join and open accounts online. If you don't qualify based on military, employer or family, you can become eligible by joining the National Military Family Association (NMFA). Please refer to How to Join Overview Page for details. Joining NMFA and Penfed can be done at the same time all online. The yearly membership for NMFA is $20, but your membership in the association does not need to be maintained to continue as a Penfed member. You can also be eligible to become a member of PenFed if you are an employee or volunteer of the American Red Cross (refer to this PenFed page).

Branch Locations

Accounts can be opened online, but for those who prefer branches, PenFed has branches in several parts of the country including Washington DC, Maryland, Virginia, New Jersey, New York, Colorado, North Carolina, Hawaii, Puerto Rico, Missouri and Texas.

Financial/NCUA Info

PenFed's ratings for safety and soundness are no longer the best, but they remain respectable: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 6/30/09 financial data.

PenFed is one of the largest credit unions in the US with $13.4 billion in assets and 889,874 members. It's federally insured by the NCUA (Charter # 227).