PenFed's New ACH Online Transfer Service
Last month a reader informed me about Pentagon Federal Credit Union's (PenFed's) new online ACH transfer service. This allows PenFed members to initiate ACH transfers when they're logged into their PenFed accounts. PenFed has long had the capability of funding a new account with an ACH transfer. In all my CDs that I've opened at PenFed, I have used that feature to deposit funds. This new service allows you to transfer money into and out of your liquid accounts (savings, money market and checking accounts). This can be useful when your PenFed's CDs mature. If you don't want to renew the PenFed CD, you can specify that the CD funds be moved to your savings account at maturity. Once in your PenFed savings account, you can initiate an ACH transfer to move that money into an external account at another credit union or at a bank.
There is one issue with this new ACH transfer service. ACH transfers are limited to $5,000 per day and per transaction. In my opinion, that's a small limit. I know many readers who have over $100,000 in PenFed CDs. If they want to move their money when their PenFed CDs mature, this transfer service won't be that useful. Those members may want to ask PenFed if they can get an increase in this limit. Sometimes institutions can make exceptions for long-time members. If members can't get an increase to this limit, they should be able to continue to pull funds using the ACH service of another credit union or bank. Fortunately, there are several internet banks that don't have small ACH transfer limits.
On the plus side, PenFed ACH transfers done through the website are free. No fees are charged. External bank accounts can be linked in the typical process of verifying small trial deposits that are placed into the external accounts. The reader received the following details from a PenFed CSR about transfer times:
For incoming ACH transfers, the funds are automatically available in your PenFed account and may take up to 24 to 48 hours to debit from your external account.
However, for outgoing ACH transfers, the funds are debited immediately from your PenFed account and processing time may differ in regard to how long the deposit takes to reach your external account. Generally, the deposit will occur within 24 to 48 hours as well, but we recommend contacting any external institution you may be transferring to for further information regarding incoming ACH transfers
Thanks to the reader who provided this PenFed info.
To use this ACH transfer service, first log into your PenFed account. Click on the "Transfers" tab of the top menu. To link new accounts, select the "Non-PenFed Accounts" tab in the submenu.
PenFed has a long history of competitive CD rates, but currently, there are other credit unions that offer higher CD rates. So PenFed members who have CDs maturing may want to transfer their money to other credit unions or banks. This new transfer service helps a little, but you are better off using the transfer service of an internet bank that doesn't have small limits.
Pentagon Federal Credit Union is the third largest credit union in the nation. Its headquarters is in Alexandria, Virginia, and it has branches in several states.
People can apply for membership and open accounts online. Anyone can qualify for membership 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. For more details, click on the "Join PenFed" link at the top menu of PenFed's home page. Then select "None of the above" option in the "How Are You Eligible" page.
PenFed is federally insured by the NCUA (Charter # 227).
It makes funding PFCU CDs even easier. It likewise makes moving CD interest proceeds to other accounts for use easier. And of course it's also helpful for handling the proceeds of maturing PFCU proceeds.
While I like and use ACH transfer capability accounts that have NO fees and HIGH limits like Charles Schwab and E*Trade, if I had to choose between one or the other, I'd still pick an account with NO transfer fees and limits on the daily amounts allowed.
I really object to being nickel and dimed by my banks or CUs -- or more accurately, $3'd or $5'd or more -- every time I want to move funds into or out of an account. Kudos to PFCU for once again service their customers.
"THERE IS A MAXIMUM LIMIT OF $5000.00 FOR AGGREGATE OUTBOUND ELECTRONIC (ACH) TRANSACTIONS IN A ROLLING 3 CALENDAR DAY PERIOD. " In short, you can transfer out $5k every 3 days.