What is your opinion of PenFed?

[DRiP Guy]

PenFed rocks. Also got some of that 6.25% CD action myself, and they were fast, friendly, and competent. Have a share account there, and also like their on line site, because it is so darn simple. Just the info. Plain and simple.

And as previously noted, looks like in Jan they knock off their funding pool, and do it by blowing the socks off of everyone else. I'll bet it's win win, because the investor class they end up with via the "unadvertised insider special" is savvy and not going to be skittish and pull out before maturity or otherwise cause them any hassles with the funding pool.

So since they have stability and no muss, fuss, or large customer service worries on our end, the savings get passed on to us in the form of a once-per-year premium-level CD rate.

It's a beautiful thing.

 

[cute fuzzy bunny]

Darn got all 'wet' thinking I could get 6%+ on a midterm cd

You might have...some months ago...and perhaps yet again.

But I'm thinking that rates like that might not be back around again for a few years.

 

[xmanz3]

Cute Fuzzy Bunny:

Here's the info

Emerging Markets Fund (USEMX)
Aggresive
Expense Ratio 1.61%
1yr 36.23% 5yr 23.94% 10yr 7.61%

USAA Precious Metals and Minerals Fund (USAGX)
Very Aggresive
Expense Ratio 1.21%
1yr 17.70% 3yr 30.24% 5yr 24.45% 10yr 15.90%

 

[Nords]

Even though if you are getting a return of 26% and 21% with an expense ratio of 1.3 and 1.5%??

Nobody cares about expense ratios in a rising market, and nobody cares about anything else in a dropping market.

We have a mutual fund expense ration of 1.38%, considered "pretty good" as international ERs go, and we're still getting rid of it in favor of the 0.60% ER for the equivalent index ETF.

Our next-highest ER is our small-cap value index ETF at 0.25%.

The ER of our Berkshire Hathaway shares was an $8 trade about six years ago...

 

[Tadpole]

PenFed is great. Their customer service will even advise you to wait a few days before you buy a CD because the new rates are coming out and are higher than the current rates. It gives you that warm and fuzzy feeling that they "care" about you.

 

[cute fuzzy bunny]

Cute Fuzzy Bunny:

Here's the info

Emerging Markets Fund (USEMX)
Aggresive
Expense Ratio 1.61%
1yr 36.23% 5yr 23.94% 10yr 7.61%

USAA Precious Metals and Minerals Fund (USAGX)
Very Aggresive
Expense Ratio 1.21%
1yr 17.70% 3yr 30.24% 5yr 24.45% 10yr 15.90%

Heres a good example of fund performance and prices...check out vanguards emerging market and precious metals funds...which at a glance seem to have performed similarly or better...for under .5% expense ratios.

But heres the $64,000 question...has your advisor let you know that the emerging markets fund risk profile suggests that a 40-50% one year loss is quite plausible, or that the precious metals market went practically nowhere for the 20 years prior to the most recent 10?

These are good funds to add in 5-10% dollops to a core profile. If you're holding them in larger chunks...good luck!

 

[xmanz3]

Heres a good example of fund performance and prices...check out vanguards emerging market and precious metals funds...which at a glance seem to have performed similarly or better...for under .5% expense ratios.

But heres the $64,000 question...has your advisor let you know that the emerging markets fund risk profile suggests that a 40-50% one year loss is quite plausible, or that the precious metals market went practically nowhere for the 20 years prior to the most recent 10?

These are good funds to add in 5-10% dollops to a core profile. If you're holding them in larger chunks...good luck!

What kind of portfolio mix would you suggest I should I strive for at 33?

 

[cute fuzzy bunny]

That depends on your risk tolerance, objectives, financial status and a bunch of other stuff.

 

[Dawg52]

Well I have just had a negative experience with PenFed. I applied for a cash rewards visa card that had been discussed earlier here. I was just told that I would have to provide them with 2 years worth of tax returns and all the supporting documents related to my income. Apparently they do not like the fact that I am retired with no pension and that I am relying on dividends and interest to live on. I told them to shove it as I have never had to provide such detail with respect to a frigging credit card. I'm sure they requested a credit report on me and I know that checked out fine. Never been past due on anything. I'll just keep on using the one I have. Chaps me though.

I guess the moral to the story is if you want a new credit card, you better get it before retirement while you have a 'normal' income.

 

[wildcat]

Well I have just had a negative experience with PenFed. I applied for a cash rewards visa card that had been discussed earlier here. I was just told that I would have to provide them with 2 years worth of tax returns and all the supporting documents related to my income. Apparently they do not like the fact that I am retired with no pension and that I am relying on dividends and interest to live on. I told them to shove it as I have never had to provide such detail with respect to a frigging credit card. I'm sure they requested a credit report on me and I know that checked out fine. Never been past due on anything. I'll just keep on using the one I have. Chaps me though.

I guess the moral to the story is if you want a new credit card, you better get it before retirement while you have a 'normal' income.

They pulled a credit check when you opened your PenFed account. Strange. I wouldn't have provided them with a damn thing either.

 

[cute fuzzy bunny]

They did a credit check on me too when I opened an account to buy some cd's.

No further questions regarding my credit worthiness or other funny business.

Check your credit report lately for errors or other badness?

 

[Dawg52]

They pulled a credit check when you opened your PenFed account. Strange. I wouldn't have provided them with a damn thing either.

Yeah, it really left a bad taste in my mouth.

 

[OAG]

Been a member since 1975 (32 years). Never a problem, have had or have loans, credit cards, about 45 CD's (IRA and Regular CD's). SECOND largest CD in the USA; right behind Navy Federal CU, if I remember right. Also have direct deposit of SS and Mil Ret payments and several other smaller monthly direct deposits. Never a hold on any of them (they can not hold government deposits; but some, if not most, banks put a hold on other deposits).

 

[ESRBob]

I wonder if I dodged that credit check/tax return hoo ha because I had a CD there? They never asked for that stuff from me. Then again, this may be the way the hold down their expenses/defaults on non-active-duty members

 

[wildcat]

I wonder if I dodged that credit check/tax return hoo ha because I had a CD there? They never asked for that stuff from me. Then again, this may be the way the hold down their expenses/defaults on non-active-duty members

List of Institutions that pull HARD credit inquiries when opening a NON-CREDIT account

PenFed (unless they changed policy) does a hard credit pull when you sign up for an account. Not a huge deal unless you have a lot of them in you credit history.

 

[Dawg52]

I wonder if I dodged that credit check/tax return hoo ha because I had a CD there? They never asked for that stuff from me.

I have a 100k worth of cd's there. Another reason it shocked me they wanted the additional info. Also, the first time they called to follow up on my application they wanted to know if I had someone I would like to list as a co-signer. I said no and should have stopped the process at that point but I just thought maybe that was a standard question they ask.

I wish I had a dollar for every pre-approved credit card application that has been mailed to me over the years. Oh well........I will continue to use my GM card. Never had a problem with them. The only reason I wanted to change is because I haven't bought a new car in years and figured I may not use the credit I have accumulated. Maybe I will splurge in my old age and buy something new one day. I'd just as soon do business with someone that wants my business anyway.

 

[cute fuzzy bunny]

Oh yeah, one other thing I liked about them.

Customer service on the phone 24x7. And they encouraged me to call late at night because the lines are pretty well open. None of that BS where you call them at 5 or 6 pacific time and hear "Our business hours are 11-2, monday through friday, eastern time..."

 

[calmloki]

I have a 100k worth of cd's there. Another reason it shocked me they wanted the additional info. Also, the first time they called to follow up on my application they wanted to know if I had someone I would like to list as a co-signer. I said no and should have stopped the process at that point but I just thought maybe that was a standard question they ask.

I wish I had a dollar for every pre-approved credit card application that has been mailed to me over the years. Oh well........I will continue to use my GM card. Never had a problem with them. The only reason I wanted to change is because I haven't bought a new car in years and figured I may not use the credit I have accumulated. Maybe I will splurge in my old age and buy something new one day. I'd just as soon do business with someone that wants my business anyway.

Hey Dawg - don't take it too personally. When we bought up a bunch of the certificates earlier I got all honeymooney in luv with Penfed. Requested a credit card at a normalish to low limit. Then set as many of our bills as possible to autopay with the card. Then thought - hey! I should have asked for a higher limit to keep our credit utilization low and to befit my fantasy of being a high roller. Asked for a higher limit and the request just sat there till I enquired and got this note:

"Thank you for contacting Pentagon Federal Credit Union.

We can not consider your wife's income without her being added as a joint. All
information is based on your income alone versus your personal debt.

If you wish to add an additional person(s) to the application, please have that
person contact a Member Service Representative at 1 800 247-5626 or 510 376-7328
from a Class A DSN phone line at any time.

If you need further assistance, please contact us.

Sincerely,

Katrina Santoro
Pentagon Federal Credit Union

Original Message Follows:
------------------------

Date and Time Problem Submitted = 6/8/2007 1:35:28 PM EST

SECTION 1 - MEMBER INFORMATION

Name: ***
Email: calmloki***Phone (between 8AM - 8PM Eastern): ***Description: Requested a credit limit increase to $*0,000 to keep my
credit utilization ratio low. Please note that I have $***,000 in savings
certificates with PenFed. Our income is mostly from our rental
properties, grossing over $**,000/month. This gave ** and I
each an AGI of over $**,000 and $***,000 respectively last year. Our
credit history and score should be outstanding. For some reason the card
limit has not been increased yet, with "additional income to consider" in
the comments area. Is there some problem I'm unaware of?"

I emailed back and told them to just consider my income and the card limit was increased. Penfed is treating us better than the small town bank we have used for over 20 years.

 

[FinanceDude]

Yeah, it really left a bad taste in my mouth.

Most banks do that nowadays.........

 

[FinanceDude]

Nobody cares about expense ratios in a rising market, and nobody cares about anything else in a dropping market.

Nords, you forgot the disclaimer: "Unless you're a member of the Early Retirement Forums"..............

 

[DRiP Guy]

Yeah, it really left a bad taste in my mouth.

I hope you don't take my reply as opening a debate, because I appreciate and respect your point.

That said, however, my own position is that I am glad that PenFed is a pretty tough customer when it comes to ensuring they have good info on creditworthiness of their customers, because I want them to hold their default and collection rates low, so that I can get both the best rates of return and also the highest security.

Someone else mentioned some issues with establishing a high enough credit limit, and my point applies there, too. I make very little use of credit myself, and am willing to have very low limits, as long as it translates to lower cost/higher security.

I think this is somewhat topical, because I have been putting a lot of money lately into a couple of MM funds, as well as the CDs, as part of my cash planning. I love the idea of a high rate of return, but with the issues on the horizon with the huge sub-prime loan frenzy now coming apart, default rates on the rise, I don't want that money backed by a ton of mortgage backed securities that are composed of 'liar loans' and ARMS with stratospheric rates about to hit...

 

[Dawg52]

I hope you don't take my reply as opening a debate, because I appreciate and respect your point.

That said, however, my own position is that I am glad that PenFed is a pretty tough customer when it comes to ensuring they have good info on creditworthiness of their customers, because I want them to hold their default and collection rates low, so that I can get both the best rates of return and also the highest security.

I'm glad they want good info on the creditworthiness of their customers too. I guess their criteria was a little less when they decided to accept my 100k deposit as opposed to issuing me a credit card.

 

[Gearhead Jim]

Easy answer Bob...most of penfeds customers are heavily armed, including bombers and even nuclear weapons.

Not really the sort of people you're going to want to piss off by giving half assed service to.
...

Thanks for giving me my laugh of the day!

Right now, we have a $100k IRA CD at the 6.00% APY, very good service. Last I heard, PenFed rated 3 stars and a "3" for financial strength, which is good (but not outstanding). The NACU (?) insures that up to $250k, so we should be safe to add another $100k when the rates go back up. But still, I like to be diversified; I don't trust anyone's financial insurance. How would you folks feel about having $200k of IRA at PenFed? That would be about 20% of our fixed-income portfolio. Do you have someplace else that typically has similar rates?

 

[SecondCor521]

Penfed and USAA

I use both.

At USAA I have:
my main checking account
a credit card
my auto insurance
my homeowners insurance

At PenFed I have:
a piddly savings account (required first account)
the PenFed 5%/1.25% Visa


At USAA I used to have:
an umbrella policy

At PenFed I used to have:
a second mortgage

Both have been great. I think USAA has the better website. My mutual funds are all at Vanguard.

2Cor521

 

[Gearhead Jim]

...
Right now, we have a $100k IRA CD at the 6.00% APY, very good service. Last I heard, PenFed rated 3 stars and a "3" for financial strength, which is good (but not outstanding). The NACU (?) insures that up to $250k, so we should be safe to add another $100k when the rates go back up. But still, I like to be diversified; I don't trust anyone's financial insurance. How would you folks feel about having $200k of IRA at PenFed? That would be about 20% of our fixed-income portfolio. Do you have someplace else that typically has similar rates?

No comments or suggestions from anyone?