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Update on Pentagon Federal Credit Union CDs, Credit Cards and Other Products


Unlike many other credit unions, Pentagon Federal Credit Union didn't lower their certificate rates for April. The long-term rates remain very competitive. These include:
  • 3.50% APY 3-year
  • 3.75% APY 4-year
  • 4.00% APY 5, 7-year
These rates are listed in PenFed's certificates page as of 4/03/09. The CD rates typically last for the entire month, but they're not guaranteed to last. Minimum deposit is $1,000. They're also available as Coverdell Education Savings Certificates and as Traditional and Roth IRA Certificate.

Several readers have mentioned being offered an extra 0.25% for renewing their maturing PenFed CDs. So that makes the rates even more competitive.

For more details about PenFed's CDs and joining PenFed, please refer to this PenFed review post. 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.

Credit Cards, Auto Loans, Home Equity Loans and Mortgages

Most of the current PenFed deals are loan related. PenFed just started a hot deal for credit card balance transfers. They're offering a 2.99% APR for the life of your transferred balances. Credit for this find goes to this Fatwallet thread. According to several FW members, this promotion is scheduled to last through the end of May. One note for those interested in PenFed loans and credit cards, several FW members have reported being declined in the applications.

Here's a list of the other credit card and loan deals offered by PenFed:
  • Cash back Visa credit card with 5% cash back for gas and 2% for supermarket (see post)
  • Competitive auto loans, currently 3.99% APR 12 to 60 months, new or used (more details at this FW thread)
  • Competitive Home Equity Loans and Lines of Credit, currently 4.99% APR for up to 240 months
  • Competitive mortgages, currently 4.96% APR 30-year fixed
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.

PenFed's rating for safety and soundness at BauerFinancial remains at 5 stars (superior) based on 12/31/08 data.

PenFed is one of the largest credit unions in the US with $13 billion in assets and 846,803 members. It's federally insured by the NCUA (Charter # 227).
Related Pages: CD rates, IRA rates

Related Posts

Slug   |     |   Comment #1
Just a reminder that the credit card gives you 1.25% on all non-grocery and gas purchases. Not as good as the new 2% cards, but not too bad. Also PenFed customer service has been outstanding.
DebtGoal   |     |   Comment #2
Are there any particular advantages for someone with debt to switch their accounts to a credit union? Thanks for the advice in advance.
RJM   |     |   Comment #3
I am a very happy Penfed customer. I joined for the purpose of buying a CD over 5 years ago. I have bought many more since.

At first, they wouldnt give me a CC despite a good credit score because I had a large balance out on one (it was a 0% deal)

Later I got them to give me one with a low $1000 limit. Then after much begging and explaining that I had $100k in CDs they raised it to $5k for me. (Its still by far the lowest limit card Ive had in 15 years)

So they are crazy tight when it comes to granting credit.

I love the 5%, 2% and 1.25% card.

And unlike most places, they count both Walmart supercenters and Walmart neighborhood markets as supermarkets and pay 2% cashback.

Chase and others do not consider any walmarts to be grocery stores.

My only complaint is they dont have a rewards checking account. I really wish they did.

I will probably be opening another CD soon.
Banking Guy
Banking Guy   |     |   Comment #4
Thanks for sharing your experiences on PenFed. Counting Walmart as supermarkets is especially nice for the 2% cash back.
Anonymous   |     |   Comment #5
Re PenFed Visa & Walmart,
My purchases at Walmart using the Penfed Visa are NOT counted as grocery. YMMV.
Anonymous   |     |   Comment #6
Banking Guy, many of us, I suspect, are maxed out on PFCU CD's under the $100,000 FDIC limit, and hesitant to go any higher (more CDs with PFCU) because the current higher $250,000 FDIC at present is only temporary...

Any news on the status of the pending federal legislation to make the $250,000 FDIC limit permanent? That would open the door to folks taking out new multi-year CDs that go beyond the end of 2009...
RJM   |     |   Comment #7

I dont know how they could be giving me 2% and not everyone.

Are you SURE ?
Banking Guy
Banking Guy   |     |   Comment #8
About making the $250K FDIC/NCUA coverage permanent, it appears the status hasn't changed since my March post. The bill HR 786 appears to be on the Committee on Financial Services' calendar.
Ash   |     |   Comment #9
For anyone looking for a home equity line of credit with a good credit score, PenFed rate is very attractive (currently Prime - 0.5%).

I came across this because Amtrust Bank offered me $250 to close my HELOC with them, which was Prime + 0%. Even without the $250 offer, a HELOC with Prime minus is a good deal right now.

Keep in mind this rate is not fixed and does rise when the Fed raised interest rates.
rjm   |     |   Comment #10
I have again CONFIRMED via my statements that I am indeed getting 2% back on both walmart supercenter and walmart neighborhood market.

Its easy for me to see because they break down your 5%,2% and 1.25% purchases year to date.

And I do use it at walmart regularly but rarely at other places that only pay 1.25%.

I use the penfed card primarly for gas & walmart while I use Chase for Groceries, Phone bill and usually either drug stores or fast food.
And I use chase for everything else even though its just 1%. Because when I get to $200 they give a $50 bonus which effectively means 3% becomes 3.75% and 1% becomes 1.25%.
Anonymous   |     |   Comment #11
Pen Fed is now offering 5% cash back on their rewards cc for any airline tickets. This is a short time offer but it is great if you are flying anywhere this summer. Rod
Anonymous   |     |   Comment #12
Now is May 31 evening time, and just to play it safe, I opened a new 5-year CD at PenFed today with a 4% interest rate (ahead of any possible rate change/ reduction at the start of June).

I'd been holding off previously because I'd been maxed out under the prior $100K FDIC basic limit with PenFed. But for once, the federal government did something in time, just recently raising the FDIC limit to $250K until the end of 2013.

My newest CD will take me over the prior $100K limit starting today, and then potentially again during 2014. But I'll have other PedFed CDs maturing before then, meaning I'll have the option to bring my total PedFed balance back below the $100K amount -- just in case the Feds should revert back to $100K effective January 1, 2014.

However, I'd doubt very much that is likely to happen. The FDIC limit may not stay at $250K permanently, but by 2014, I can't see it going back to $100K.
Anonymous   |     |   Comment #13
does anyone know the penalty for closing a CD before maturity w/ penfed?
Banking Guy
Banking Guy   |     |   Comment #14
for terms of one year to 5 years, it's 180 days of interest penalty. More details are listed in the last page of PenFed's application document.
Dave   |     |   Comment #15
Very dissatisfied former Pentagon Federal Visa cardholder. They have a new policy where they do not open up your credit until 10 days after a payment has been received. This significantly reduces your effective credit and essentially assumes no one can be trusted.

I have stopped using my Pentagon Federal Visa card and have since added a second Chase Rewards card (no longer available online but can be applied for at most branches). Better cash back benefits and much better customer service in my experience.
Anonymous   |     |   Comment #16
Pnetagon just lowered there 5 year CD down from 4% to 3.51%