Dedicated to Deposits: Deals, Data, and Discussion

Update on PenFed CDs for January - New and Rollover CDs

POSTED ON BY

Pentagon Federal Credit Union
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).
  Tags: New York, North Carolina, Texas, Virginia, Pentagon Federal Credit Union, Colorado, CD rates, Maryland, New Jersey, IRA rates

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Comments
16 comments.
Comment #1 by JRG (anonymous) posted on
JRG
Are you sure? Are you saying you already know the Jan 2010 rates (with or without that extra 25%)? How? PENFED never says the rates until the first of the month, so why would they advertise a rate higher in Jan than Dec so early? I'm confused.

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Comment #2 by Anonymous posted on
Anonymous
I tried to "rollover" my certificate, but there is no indication that I have reserved the new rate.

1
Comment #3 by RJM (anonymous) posted on
RJM
I signed up for the 3 year rollover.

Can I now change it to a 4 year if I want to ?

Not sure I want to. Just curious as the 4 year was not an option when I signed up.

1
Comment #4 by bkm (anonymous) posted on
bkm
So if I reserved my CD two weeks ago when the promotion first started do I need to re-reserve again?

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Comment #5 by Banking Guy (anonymous) posted on
Banking Guy
@JRG I was surprised to learn from my contact that PenFed's board has already approved the rates for January. I had thought the board meeting would be around the middle of the month. Perhaps it's due to the holidays. I'm sure they won't be posting them on their website until January. We have been able to get early news of PenFed rates before. We heard rumors of PenFed's 6.25% CDs that came out in January 2007 around mid December 2006.

@RJM About changing your rollover from 3yr to 4yr, a member service rep should be able to assist you with that. I would think that would be possible.

@BKM You shouldn't need to re-reserve again. As I mentioned above, my contact said "All members who participated in the Certificate Reservation program will have their reservations honored and they will receive the advertised rate."

One more thing to note is that if you do rollover and something happens after renewal to change your mind, you can do an early closure without much penalty. Note the early withdrawal penalty as specified in the account application:

"In the event of early withdrawal, one of the following penalties shall apply: ... 2) Certificates Having a Term Greater Than Six Months and up to and including 5 years, a) if redeemed within 180 days of the issue date or any renewal date, all dividends will be forfeited. b) if redeemed thereafter, but prior to the maturity date, dividends for the most recent 180 days will be forfeited."

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Comment #6 by CapitalClimate (anonymous) posted on
CapitalClimate
I'm curious how you heard about this deal. I have a CD maturing in Jan. and I would not have known about it if I hadn't seen your earlier post.

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Comment #7 by Banking Guy (anonymous) posted on
Banking Guy
You should have received a letter from PenFed a couple of weeks ago about this original CD rollover promotion. I first emailed my PenFed contact asking if they could allow those with maturing CDs in December and February to qualify. Then when reports came in of the program being canceled, I asked about what happened. After several back-and-forth emails, I received news of this new program.

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Comment #8 by Anonymous posted on
Anonymous
I found my certificate on thier accounts summary and clicked on the + in front of it. This opens up a new window that gives you the choice if you want to renew it or not and what duration you want if renewing. Hopefully this will give me the 4% for a 5 year. I Have scads of them coming due this year. luckily I took some 5 and 7 year ones when they were at 6.25% Thanks Banking Guy. You are the Man !!!

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Comment #9 by Anonymous posted on
Anonymous
This is good news!
Now I wonder if the following still applies on IRA CD's:
"On certificates issued after September 2007, if you're 59 1/2 or older and you only take a partial withdrawal that doesn't bring the certificate below $1,000, there is no penalty"? (BankDeals -7/28/09)

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Comment #10 by Anonymous posted on
Anonymous
Hmmm, I have a CD maturing at PenFed in January and just called and the rep quoted me 2.75% for 3 yr. Either he is wrong or they changed the rate already.....

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Comment #11 by Anonymous posted on
Anonymous
Banking Guy,

Called Penfed CSR she said Board of Directors meets ate end of Dec. to set January rates for CDS.
I hope you are right about a 3.75 5 yr. Thank you for your help I have made some good money following your blog.

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Comment #12 by DarkNova (anonymous) posted on
DarkNova
Is this still going on? I don't see anywhere on penfed's site talking about these rates.

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Comment #13 by Christina Goldman (anonymous) posted on
Christina Goldman
Yes, PenFed is still offering a rollover bonus for CD's maturing in January but it appears the rates on all terms have dropped - not sure if it makes sense to lock in a long-term CD for say 5 years at only 3.25% (that's with the rollover bonus!)

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Comment #14 by Banking Guy (anonymous) posted on
Banking Guy
I checked with my contact again this week, and she confirmed the above rates are still planned for January.

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Comment #15 by Anonymous posted on
Anonymous
My PenFed CD matures on Dec. 30th and I think there is a grace period to roll it over, which would put this into January. Would this be eligible for the January rates?

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Comment #16 by Anonymous posted on
Anonymous
I signed up for the certificate reservation before they pulled it and the web site still has an asterisk next to the cert in question with a note at the bottom that it is pending to renew at dividend rate of 3.925 (4% APY) for 5 years.
However, I also have in hand a letter from them this week that my cert is due to renew at a 3 year term at a still undecided rate.
Disturbing. Doubly so as I have none of my certs set to automatically renew so why are they indicating this one will be renewed at an unspecified rate. I only agreed to the renewal of this one cert at the apy 0F 4%.
Sent off an email to them.

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