PenFed CD Update for January
Update: Only those who reserved CDs in September were able to qualify for these 10-year certificates. PenFed is not currently offering a promotion on new money 10-year certificates to any member.
Those who reserved CDs at PenFed in their Watch it Grow promotion should be seeing their CDs take effect (based on when they specified the start date). A reader had reported being told that those who did not qualify for these CDs may not have their CDs funded. This does not appear to be correct. Here's a comment from one reader who has verified that all CDs are being funded:
For all those worried about PenFed's 10yr CD promo, fear not. I had reserved through the glitch starting 1 Jan 2011. It is now posted as one of my CDs. Note: I had no CD maturing in Sep or Oct or whatever those stupid promo rules stipulated. Was all new money.
This corresponds to what I was told by my PenFed contact in September.
Those who reserved these CDs are fortunate because rates have continued to fall since the time this promotion was announced. PenFed released its new January rates today, and the 7-year and 5-year CD rates have fallen by 25 basis points.
I'm afraid the 10-year CD is still not publicly available. In September I was told they had planned to make this 10-year CD available to all members in January, but recently I was told this has been delayed. In the CD reservation promotion, the 10-year CD had rates 75 basis points higher than the 7-year CD (5.00% APY vs 4.25% APY). Hopefully, when the 10-year CDs are available to all members, there will be a similar premium on the rates. The 10-year term is long, but I was told the early withdrawal penalty would be the same as the 7-year CD.
Below are the new PenFed CD yields for January 2011. I've noted the old yields in parenthesis.
- 3.00% APY 7-year CD (was 3.25%)
- 2.50% APY 5-year CD (was 2.75%)
- 2.25% APY 4-year CD (no change)
- 1.75% APY 3-year CD (no change)
- 1.50% APY 2-year CD (no change)
- 1.26% APY 1-year CD (no change)
Minimum deposit is $1,000. The rates are also available in an IRA. These yields are listed in PenFed's Money Market Certificates page as of 1/01/2011. Even though PenFed typically maintains CD rates through the month, they no longer guarantee it. For more details about PenFed CDs, please refer to my PenFed CD review.
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.
Accounts can be opened online, but for those who prefer opening accounts in an office, 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.
PenFed has an overall health score at DepositAccounts.com of 4 out of 5 with a Texas Ratio of 7.07% (excellent) based on September 2010 data. It's one of the largest credit unions in the nation with $14.87 billion in assets and $11.79 billion in deposits. Please refer to our financial overview of Pentagon Federal Credit Union for more details. It's federally insured by the NCUA (Charter # 227).
Searching for the Best CD Rates
To search for the best nationwide rates and the best rates in your state, please refer to the following tables at DepositAccounts.com:
Banks Mentioned in this Post:
|Pentagon Federal Credit Union|
Locations: 24 Health Rating:
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