Pentagon Federal Credit Union is now offering a generous 6.25% APY rate on it’s 3, 4, 5, and 7-year CDs (they call it a Money Market Certificate). These rates probably won’t last, so if this looks good to you you may want to jump in now.
These certificates may be a good alternative to online savings accounts for your emergency funds or other accounts with medium-length horizons. Penfed only has a $1,000 minimum on each certificate, and has relatively lenient penalties on early withdrawals. I wouldn’t use these for retirement savings if you’re young, though.
Since this is a credit union, you must meet their eligibility requirements to join. Basically all members of the military and their immediate families are welcome, as well as many other military-related groups. Otherwise, the easiest way to join is through the National Military Family Associaton (NMFA). Membership costs $20/yr, and you don’t need to renew in order to remain a PenFed member. There are some good benefits to being part of NMFA, such as scholarships, GEICO discounts, and helping support military families.
I’ve been a member for about 3 years now, and have been very satisfied with their customer service. They have other good financial products as well, including competitive mortgage loan products.
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Wow, that’s an awesome rate! Wish I could join, but they don’t allow Dept of Navy personnel to join, maybe because we have Navy Federal Credit Union…I thought these were totally private orgs and could set their own rules on who could join?
I’ve been pleased with PFCU service and products.
Terry
This is a great offer. Probably good if one does some laddering. Last time I saw these rates were with the Farmers CU and I did not jump on to that in time.
Any thoughts from anyone?
WJ – I think you can join through NMFA. Credit unions definitely can restrict membership however they like. However, many of them allow a way for anyone to join on purpose. I guess it improves their money pool? I’m not sure.
Good point about laddering. These would be perfect for those who do that.
I have some older 3- and 5-year CDs from PenFed. The online interface is easy to use, and you can change how it renews at maturity very easily.
WJ,
Yes you can join PenFed even though you are Navy. I’ve been a NFCU member for 30 years (retired USN) and when I called to join PenFed this past fall, all I needed to do was join National Military Families Asso (NFMA) for $20, then I was eligible for PenFed membership. Check their website because there may be other organizations that you are already affiliated with that may qualify you for membership. Once you do your initial membership with NFMA you do not need to renew. Once a credit union member….always a member. Good luck. I’ve been pleased with them thus far!
Oh, goodie! Another credy uny membershipy to snagg, along with a great place to transfer my current IRA CD!
Any idea of when this offer ends? I’m opening an account today, but my CD doesn’t mature until June 2007.
I read on Bankrate that in 2007 we could soon expect to see a bump in rates but that it would be a short phase because the Fed is expected to lower rates. Which means it’s time to lock in those CDs for the longterm!
WJ-
“maybe because we have Navy Federal Credit Union?”
Oh, you poor thing! {{hug}}
I got into NFCU because my stepdad’s in the Navy.
Could you tell us what went wrong so that other people who are in your situation could have some clue as to why you didn’t get in?
Jonathan-
Credit unions by law have to restrict membership some way. That is how they keep their tax-exempt nonprofit status. I’ve see credit unions that are very liberal in that I’ve been granted membership for simply living in a particular city or county. And, I’ve seen membership so restrictive that you pretty much have to be a member of Congress or a member of their family in order to join (e.g. Congressional Federal Credit Union, United States Senate Federal Credit Union, etc.). All of this is up to how restrictive they want to be and local laws vary from state to state.
My credit union memberships so far:
– Navy Federal Credit Union
– Credit Union of Southern California
– University & State Employees Credit Union
– California Credit Union
– Pentagon Federal Credit Union (new!)
Imagine that! Access to my money in many locations with great rates and excellent credit card, insurance and mortagage offers.
Students can join SAME (Society of Military Engineers) for free and meet eligibility requirements for PenFed. 🙂
Also, PenFed’s Cash Rewards Visa is now offering 5% cashback on gas, in addition to 1.25% on everything else.
Since, I don’t live anywhere close to PFCUs branches, what do you think of this online bank — http://www.mlnbank.com/homepage.htm
Thanks.
Not too impressive given inflation is really around 7% to 10% per year at times.
http://www.shadowstats.com/
My purchasing experiences for laboratory items show 6% to 10% increase.
Watch out for Millenium Bank, their CDs are not FDIC insured.
PFCU is great. i still have a car loan from them — 3.9% fixed (at the time!). also — Millenium Bank – -watch out — looks fraudulent to me lookin gat their ns record history
THANKS for posting this! i have researched around a little bit. this looks like is the best offer on the market. i have to say “compound interest” are indeed my favoriate words!
cheers,
sbg*
I am thinking to open a credit card with this bank along with some CD,
Does anyone has good experience with this PFCU credit card ?.
5% Gas cashback and 1.25 % cashback seems good to me.
You can get >5% on a money market account at a number of places. Locking up your money for 3+ years is not worth 1% pre-tax, minus the $20 you need to spend to sign up.
I just went to NMFA site to become a member. They are saying that I have to open with a minimum balance of $5 and that will be treated by my credit card company as a cash advance. This is in addition to the $20 membership fee. Don’t most credit card companies charge $5 minimum fee for Cash advances?
Ven,
I used a check card to get around the cash advance issue.
Thanks lokki. I don’t have a check card. So, I guess I will use my credit card, even though it has a minimum fee of $5.
6.25% is too good a rate to pass up.
Just got of the phone with Geico.
I qualified for $110.00 (a year) Discount on my Insurance thanks to my new PenFed Account.
Very nice
Wow – Did I read this correct – Geico gives an auto insurance discount for having a CD with PenFed ?????
Do you know if this is a Geico only deal or other insurance companies as well ?
I can’t remember if it is NMFA membership or PenFed membership that gives you a 10% discount to GEICO. I’d give them a call. I think it’s only GEICO.
The PENFED-GEICO discount varies and you might not get it at all. GEICO informed me that the sponsor marketing promotion varies by state and company. since my i’m listed under an “ultra-preferred” company, I do not receive the discount. You must be listed under a “preferred” company as far as the company portion of state and company is concerned.
Neither of us have been in the military. Is this a requirement to join the credit union and to able of these great rates? It sounds as though it is a requirement.