Pentagon Federal Credit Union
Pentagon Federal Credit Union (aka PenFed) is a credit union in Washington, DC area. It often has good rates on CDs, mortgage and home equity loans, and car loans. It also has a good rebate credit card. Deposits with PenFed are insured by NCUA.
In the last few years (2005 - 2008), PenFed had offered CDs at market leading rates in late December and early January. Current CD rates. PenFed offers some of the best ongoing CD rates, and so is a common Boglehead choice for holding all or part of an IRA that you wish to invest in CDs.
According to PenFed's current disclosures (paragraph XIII 4(g)(3)(iv) on page 15), "The penalties described above will not be applied if the withdrawal is made... If the owner has reached age 59½ and takes a partial withdrawal." Thus, if you are over 59½ and rates improve and buying your CD, you can likely take most of your money out of a PenFed CD and reinvest it with them or another bank.
PenFed used to offer mortgages with no lender closing cost. As of March 31, 2009, all fixed rate mortgages have a 1% origination fee. See current mortgage rates. In addition to 15-, 20-, and 30-year fixed rate mortgages, PenFed also has a unique 5/5 ARM product.
The 5/5 ARM offers
- Adjustable Rate Mortgage with a low rate that only adjusts every 5 years for 30 years
- Rate would adjust up to 2% or our prevailing rate, whichever is the lowest
- Maximum lifetime adjustment that will not exceed 5% above the initial rate
Because the rate only adjusts every five years, with a 2% cap, the 5/5 ARM is a good alternative to the more common 5/1 ARM offered elsewhere. PenFed also offers 1/1, 3/1, 5/1, 7/1, and 10/1 ARM.
Rebate Credit Card
PenFed offers a Visa Platinum Cash Rewards credit card which gives 5% rebate for gas paid at the pump, 2% rebate for supermarket purchases, and 1.25% for everything else. Rebate is automatically credited to statement every month. There is no cap to the rebate amount.