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Update on PenFed CDs and CD Rollovers


I received info from PenFed contact yesterday concerning January CD rollovers. The good news is that those who participated in the November Certificate Reservation program will have the advertised rates honored (3.50% 3 years, 4.00% 4 years and 4.25% 7 years). Several readers in my previous PenFed post have also confirmed the same thing. However, those who missed the November Certificate Reservation program won't be getting those top rates. It appears that the interest rate environment was turning out to be worse than what they had expected. Below are the details that I received:
At the December meeting, our Board of Director approved lower Money Market & IRA Certificate rates for January 2010 than previously announced. We became aware of the change in rates on December 29. It is very rare for the Board of Directors to make a change in the rates after we project them, but in this case; other factors in the market forced us to lower our projected rates slightly.

As indicated in all of our disclosure statements, our rates are always subject to change. Below, I have provided a few key points regarding the rates along with a January 2010 rate chart.

* All members who participated in the CD Rollover Subscription program will have their reservations honored, and they will receive the advertised rate from that promotion: 3 yr/3.50%, 5 yr/4:00% and 7 yr/4.25

* With the exception of CD Rollover Subscription enrollees that will receive the promised CD Rollover Subscription rates, the 0.25% APY certificate rollover bonus will be applied to all qualifying certificates rolling over between December 29, 2009 and February 1, 2010, inclusive. These certificates will receive the "Rollover " rates reflected in the chart below. Update 1/06/09: I received a clarification about the below rates. For those members with CDs maturing December 29-31, 2009 and February 1, 2010 (and did not participate in the CD Reservation program), and wish to rollover, they will receive the rate in effect for that month - plus the 0.25% bonus.

APY for
CD CD Subscription APY for APY for
Term Participants Rollovers New Money
---- --------------- --------- ---------
6 mo - 1.00% 1.00%
1 yr - 1.25% 1.25%
2 yr - 1.75% 1.75%
3 yr 3.50% 3.25% 3.00%
4 yr - 3.50% 3.25%
5 yr 4.00% 3.75% 3.50%
7 yr 4.25% 4.00% 3.75%

For more details about PenFed CDs and membership, please refer to my previous PenFed post.

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

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Anonymous   |     |   Comment #1
Some of us didn't get in on time because PenFed selectively chose not to allow all of their current CDs to roll over, therefore, I'm moving out my funds to my local CU with even better terms than those at PenFed.
Rachel   |     |   Comment #2
Penfed refused to honor the rollover rate. They told me I had to mail in the offer. I told them that was not on the paper! Asked to speak to a manager. The manager said he had to get the OK from the VP. He left a message today - that he got OK! Penfed is trying hard not to stick to their offer!!!
Rachel   |     |   Comment #3
Penfed did not want to honor the rollover rate with me! I had to speak to a manager. He gave me a difficult time. He said they had the right to change those rates! I told him I did not want to hear that! He said he would have to go to the Vice-Pres and get the OK. He left a message on my vm - he got the OK! They are tuff!!!
Anonymous   |     |   Comment #4
I need to think about this 0.25 percent reduction, especially in this low rate environment, as well as the extended length of the term...
Anonymous   |     |   Comment #5
I never received the renew offer in email/post and I did not opt for renewal in Novmeber. Can I still get the bonus if I decide to renew now? How were you supposed to let them know in Nov that you want to renew.
Anonymous   |     |   Comment #6
Back in November the Reserved Certificate Rates for roll overs due in January was advertised on Penfed's web-site. Didn't last long though.

Any member can still receive a .25% point increase over the current rates for any certificate rolled over in the current month of January. But that rate total will still be a quarter point lower than the rates to be paid on certificates that were reserved back in November.

Refer to Banking Guy's comparison in the subject matter of this topic.
Gregory   |     |   Comment #7
Penfed is not honoring their agreement even for people who reserved. I reserved the 3.5% 3 year rate in November, and was assured it would be provided. I logged in yesterday to see a 3.25% rate. I emailed them, and they write back saying that the board decided not to honor their agreements. Moreover, they are not even notifying people that they will not honor the rate that people accepted. This is obviously illegal (breach of contract) and a terrible way to treat their members. You should check your account and object if you accepted their offer and reserved the higher rate. What a shabby institution. I intend to pursue this with their regulator and if necessary in small claims court.
Anonymous   |     |   Comment #8
I also checked on the CD that matured. They did not honor the reserved rate I was told I would receive. It was 0.25% less (5 year term, 3.75% vs. 4.00%).
Banking Guy
Banking Guy   |     |   Comment #9
I was told if a member submitted a request to participate in the CD reservation program after it was canceled (Nov 24th), then the member will not qualify for the rate offered for this program. However, I'm still being told that all members who had participated in this program by Nov 24th will get the original bonus rates.
ctgottapee   |     |   Comment #10
this tells you just how difficult the banking environment and interest rate situation is. penfed has really been one of the standouts in customer service and rates and now even they are getting a little bit tough.

of course it is not surprising that they won't give preferential treatment to people who didn't get every mark checked. i'm guessing that they have plenty of money to cover what little loaning they are doing.
Anonymous   |     |   Comment #11
I reserved the rate of 3.5% over phone as per their written offer. My CD rolled over at 3.25%. I called... spoke with a rep and he wanted me to read the offer his way... that is... "I should have reserved online not by phone" + bunch of other excuses.

I asked for his boss and then her boss... and persisted until they said YES!!!

It was not about extra 0.25%... but about poor customer service and telling a lie. They are not tough! They just don't have their act together... making customers / reps / managers waste their precious time.

I hope they honor the rates promised in November for EVERYBODY without giving any hard time.

If the "Board" doesn't read this message and honor their commitment for ALL the customers, please fight for your right until they fix it :)

Btw... you can't transfer money out to your linked external account. It's only for transferring the money in!!! They will charge you 20 dollars for wire transfer out.

I respected this bank a lot... for the name of Pentagon and great rates... not any more :(
Anonymous   |     |   Comment #12
Does anyone know what the early withdrawal penalty is for 7 year CDs? It is 180 days for 3 and 5 year terms.

Anonymous   |     |   Comment #13
I reserved a 5yr roll-over CD on-line back on Nov 23. My CD rolled over on Jan 12. Checked my account today and the new CD was for 4.00% APY as specified.
Anonymous   |     |   Comment #14
Hi.  I am still trying to get my rate honored.  Can anyone PLEASE help me by posting a copy of the CD reservation page or the exact wording on that page in the forum here?  I have the yellow card but I don't know the exact wording on the online cd reservation page other than the page states that this offer expieres when $250 million has been reserved or on 1/31/2010. Does anyone who got their CD approved know the name of the VP who gave approval?  Thanks and good luck to everyone trying to get the rate. 
Anonymous   |     |   Comment #15
Just to clarify when I write that the online cd reservation page other than the page states that this offer expieres when $250 million has been reserved or on 1/31/2010 I got that from something posted in this blog.  I believe Banking Guy posted it.  Thanks.
Anonymous   |     |   Comment #16
Correcting for typo, sorry.  Just to clarify when I write that the online cd reservation page states that this offer expires when $250 million has been reserved or on 1/31/2010 I got that from something posted in this blog.  I believe Banking Guy posted it.  Thanks.