Pentagon Federal Credit Union
Federally chartered in 1935, Pentagon Federal Credit Union ("PenFed") is a non-profit credit union that serves over 780,000 members in the Air Force, Army, Coast Guard, Department of Homeland Security, Department of Defense, defense-related companies, and the Veterans of Foreign Wars.
See how to join. Anyone can join by paying a one-time $20 fee to a non-profit organization National Military Family Association (NMFA). Or, join for free if you are a volunteer for the American Red Cross.
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.
IRA Early Withdrawals
According to PenFed's current IRA 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 after 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 also offers mortgages. 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 competitive 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.