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Update on Pentagon Federal Credit Union's Certificates - Update


At the start of previous months I had been pleasantly surprised to see Pentagon Federal Credit Union maintaining their competitive long-term CD rates. Our luck ran out for July. PenFed made big cuts today, but they remain fairly competitive in today's very low interest rate environment. They kept their short-term CD rates the same. These short-term rates have rarely been competitive, but with this rate environment, they're not too bad. Below if the full list of PenFed's current CD rates:
  • 1.75% APY 6-month
  • 2.00% APY 1-year
  • 2.25% APY 2-year
  • 2.78% APY 3-year
  • 3.14% APY 4-year
  • 3.51% APY 5-year
  • 4.00% APY 7-year
These rates are listed in PenFed's certificates page as of 7/01/09. 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 will help a little for those with maturing PenFed CDs.

The early withdrawal penalty is up to 180 days of interest for terms over 6 months to 5 years. The 7-year CD has a 365-day interest penalty. Even though the 7-year CD rate remained at 4% APY, it does have this downside as compared to the 5-year CD.

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.

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.

Most of the current PenFed deals are loan related. I described their latest credit card and loan deals in this May 10th post. They have one of the best cash-back credit cards.

PenFed's rating for safety and soundness has gone down a bit. At BauerFinancial, it's now 4 stars (excellent) based on 3/31/09 data. This is down from 5 stars (superior) when it was based on 12/31/08 data. Bankrate.com still only has ratings based on 12/31/08 data, and its rating is still 3 stars (performing).

PenFed is one of the largest credit unions in the US with $13 billion in assets and 889,874 members. It's federally insured by the NCUA (Charter # 227).

Other High Certificate of Deposit Rates
Related Pages: CD rates, IRA rates

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Angelo_Frank   |     |   Comment #1
I've been with PenFed a very long time. This is the first time that I remember them taking the 5-year share certificate rate below 4.00% APY. Luckily, I got in on time in June. It is bad out there for savers and appears to be getting worse. The Fed expects a low interest environment for several years to come. Get used to very low yields on your savings in the 1-3% range, if not lower.
Anonymous   |     |   Comment #2
One of the best aspects of the PenFed CDs is the ability to open them over the phone and have the CSR pull the funds from an external account - even if the account is not linked to your PenFed share account.
Anonymous   |     |   Comment #3
Opening online you can also ACH pull from a non linked external account and it is considered available that same day for buying CD. I did this yesterday, 6/30 and got the 4% rate.

Thanks for pointing out the other day that end of month was approaching and possible they would drop lates on the 1st.