With all the CD rate cuts over the last couple of months, I was happy to see that Pentagon Federal Credit Union kept its CD rates the same in October. These rates have held up since March 2011. At that time, these rates were not that competitive, but now PenFed's long-term CD rates are back near the top for nationally available CDs.
Below are PenFed's long-term CD yields as listed in PenFed's Money Market Certificates page as of 10/05/2011.
- 2.75% APY 7-year CD & IRA CD
- 2.25% APY 5-year CD & IRA CD
- 2.00% APY 4-year CD & IRA CD
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 10/05/2011. 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.
There's one thing that happened that has made PenFed's 5-year CD less competitive is a larger early withdrawal penalty. The penalty now matches the 7-year EWP: up to 365 days of interest. Note, the penalty doesn't eat into the principal so if you redeem the CD before 365 days from the issue date, you'll just lose all of the accrued interest. Please refer to PenFed's disclosure.
It should be noted that PenFed did the honorable thing in how it changed the EWP. The change applied only to new CDs or CDs that were rolled over. It did not apply to existing CDs. Not all credit unions have done this.
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 (one-time $20 fee) or by joining the Voices for America's Troops (one-time $15 fee). Joining one of these organizations and joining PenFed can be done at the same time all online. Please refer to PenFed's How to Join Overview Page for details.
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 is one of the largest credit unions in the nation. It has over $12 billion in deposits. PenFed has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas Ratio of 4.82% (excellent) based on June 2011 data. Please refer to our financial overview of Pentagon Federal Credit Union for more details. It's federally insured by the NCUA (Charter # 227).
News on PenFed's Credit Cards
PenFed announced yesterday that it has eliminated the Foreign Transaction Fee for all of its credit cards. This is a nice perk for those who travel overseas.
How These CD Rates Compare
PenFed's 7-year CD rate is now on top for nationally available 7-year CD rates. Navy FCU 7-year CD rate is a little higher with a 2.80% APY for a $20K minimum, but you must have a military connection to be eligible to join. The highest nationally available 7-year CD rate from a bank is only 2.25% APY at Discover Bank.
PenFed's 4-year CD and 5-year CD rates are close to the best CD rates at banks. However, there are some all-access credit unions which offer much better deals. These include Alliant Credit Union's 2.45% APY 4-year CD and Firstmark Credit Union's 2.75% APY 5-year CD (2.85% APY for $100K). These rates are accurate as of 10/05/2011.
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: