PENFED Rates Change 6%

[OAG]

Penfed has 6% APY Certificates from 3 years and up as of today 9/27/07.

 

[kaneohe]

Thanks for the alert.

 

[retire@40]

The fed cuts rates and PenFed increases their payout rates. I don't get it.

 

[Nords]

The fed cuts rates and PenFed increases their payout rates. I don't get it.

We've debated this before, with Brewer postulating that PenFed is adjusting the duration of their portfolio by offering more money for longer maturities.

They jumped a whole percentage point over their old rates, and they're matching Navy Federal's (no longer available) deal of 6% APY for 10 months. NFCU's current highest rate is 5.30% APY for seven years. So maybe there's some arch-rival competitiveness in this too.

As people start having to confront rising ARM payments, I bet a lot of them will find PenFed to be an attractive source of mortgage refinancing. So perhaps PenFed is also trying to pile up the cash in anticipation of a pile-up of new customers. Even at a mortgage APY of 6.01% a non-profit can make a lot of money from the volume.

 

[Gearhead Jim]

A couple of months ago, Penfed eliminated the provision that members over 59 1/2 years old could take distributions from their IRA certificates, without penalty. Certificates issued before the change are grandfatherd for one withdrawl/flip.

The "no penalty" provision made the Penfed CD's a no-lose deal. If rates stay the same or go down, congratulate yourself on being so brilliant. If rates go up, just flip the certificate into one at the new higher rate.

AFAIK, no other institution offers that provision at this time. Did I miss something?

Also, I didn't check what the penalty is at Penfed for withdrawing from one of the new certificates. Is there an easy way to calculate the circumstances where it is still worthwhile to take the penalty, in return for a new higher rate?

 

[JohnEyles]

Cool ! I thought they normally didn't roll out the great
rates 'til January. Christmas came early this year.

But you still wanna limit your deposits there to $100K,
right (because of the FDIC insurance cap) ?

 

[73ss454]

Not sure but if your married you can put one in DW's name, one in your name and one in both names. Can someone confirm this?

 

[twaddle]

You can do $400K without too much sweat: $100K each for you and spouse, and then $200K for a joint account.

National Credit Union Administration - Share Insurance

And for Jim: the break-up penalty is 6 months interest for most terms, and a full year for 7-year term.

 

[DRiP Guy]

The fed cuts rates and PenFed increases their payout rates. I don't get it.

I did; bought in last night .

I also got the 6.25% last year. It is hard to beat the end of year Pen Fed offering.

 

[DRiP Guy]

I didn't check what the penalty is at Penfed for withdrawing from one of the new certificates.

I also didn't this time on the 3 yr I bought, but last time on the 1 yr. it was pretty dang near perfect -- only penalty for early withdrawal was loss of that quarter's interest, and future interest. Pretty sweet deal.

 

[OAG]

About $425K there and all is NFCU Insured. My acct, her account, our account and her IRA and my IRA. 60% are at 6% or better rates, including 100% of IRA funds at 6.25%, and maturing over the next 7 years (through 2014). DW will start RMD's next year and I will start in 2011. We have been members of PFCU for over 32 years and they have almost always had the best rates on CD's, not to mention good rates on personal loans, car loans and mortgages.

 

[sidney]

Do you know if it is possible to buy these in a brokerage (IRA) account or do they have to be held in a Penfed account?

thanks

Sid

 

[MJ]

I wish I could put in a couple of 100K but alas, I am maxed out with the NCUA.
Being single with no children, the last time they had the 6% offering, I made my 3 brothers beneficiaries to increase my deposits 3 fold.

I have been trying to find CUs that would match PFCU but so far no luck.

Oh well.


MJ

 

[twaddle]

Yup, adding a POD beneficiary is probably the easiest way to increase your insurance level. PenFed let's you designate a beneficiary at application time, but if you want to put them in a joint account, you need to send back additional paper work.

 

[Darryl]

Thanks R Wood. Your post was the last straw I just applied for membership at Penfed so I can jump on this.

It's been traumatic watching the posts on Penfed & NFCU and not participating in some of the excellent deals you guys have been doing.

 

[mountaintosea]

Hey I have a question for you members who have been using PenFed for a while. What is this quarterly inactivity fee they impose if there is no activity on the account for one year? I perused their service fee statement but could not find anything. Obviously if I'm only using it for the CD rate, it will be inactive for 3 years. Any comments?

 

[Nords]

Hey I have a question for you members who have been using PenFed for a while. What is this quarterly inactivity fee they impose if there is no activity on the account for one year? I perused their service fee statement but could not find anything. Obviously if I'm only using it for the CD rate, it will be inactive for 3 years. Any comments?

I've been with PenFed for 13 months (since 31 Aug 06) and they haven't complained. I've had at least one CD on deposit with them continuously since then.

Maybe "inactivity" refers to not having any funds on deposit.

I bet they only use that fee if they feel that they're being unfairly taken advantage of. I'd balance the quarterly fee against their CD rates, but if I was getting nickeled&dimed then I'd be outta there in a heartbeat. I'm pretty sure I'm just one of millions of [-]curmudgeonly old phart military veterans[/-] activist customers who'd ditch them without a backward glance.

 

[OAG]

Montaintosea: I have been a member for 32 years (but at NFCU only about 1.5 years). NEVER charged any type of fee for inactive accounts. I have set up accounts for kids and grandkids, and those accounts, more or less, lie dormant (will ease transfer of funds, when the time comes, where they are beneficiaries on some of my other accounts/CD's there). Cheap estate management!

 

[Dogcliff]

January

Cool ! I thought they normally didn't roll out the great
rates 'til January. Christmas came early this year.

Anyone believe that there may still be a killer New Years offering (6.? %)?

dc

 

[OAG]

Maybe!

 

[thefed]

i'd love to snag a 6.0 cd..that's awesome. my firecalc comes out right if i earn only 6.25% over 20 yrs....soo....this could get me darn close!! i think i'll wait til january and see what happends...hopefully 6.25 - i'd be all over it

 

[sidney]

It is not reasonable to expect to earn 6.25% (risk free) over a 20 year horizon unless inflation kicks in in which case, your net real return is not any better.

 

[barbarus]

I say bring back the 15%+, thirty year T-bonds!!

Without the corresponding hyperinflation of course.

Subsequent Fed chairmen have not been fit to tie Paul Volker's shoelaces!!

 

[BigMoneyJim]

Hmm, I have some 4.99% lifetime balance transfer checks. Can I use one of those to buy a PenFed CD?

Also, what happens to my balance transfer fee with Chase Amazon? Does it sit there and fester at the cash advance rate until you pay the transfer balance off, or is the fee also at 4.99%?

 

[barbarus]

I say bring back the 15%+, thirty year T-bonds!!

Without the corresponding hyperinflation of course.

Subsequent Fed chairmen have not been fit to tie Paul Volker's shoelaces!!

Or Paul Volcker's either.