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I Couldn’t Help Myself. I Joined Another Credit Union!


I tell myself enough is enough.

With accounts at some 30 banks and credit unions, I don’t need to further complicate my life.

Then along comes an attractive CD deal, and, like a mindless hoarder, I surrender to my addiction to favorable CD rates and add yet another institution to my unwieldy collection.

This happened recently when Pentagon Federal launched a 1.61% APY 3-year CD offering. (It calls its CDs “Money Market Certificates.”)

I just couldn’t resist joining the Virginia-based credit union.

Before I invest in any new institution, however, I try to curb my enthusiasm long enough to perform at least minimal due diligence.

First, I research the FDIC’s (or NCUA’s) website to confirm deposit insurance coverage and check Bankrate.com’s “Safe & Sound” rating.

I don’t want any surprises later on, potentially triggering an early CD closure or, worse, a loss.

I found that PenFed was chartered in 1935, has a 4-Star “Safe & Sound” rating and boasts about $12 billion in deposits – all fine by me.

Next, I peruse FAQs and (where available) Truth in Savings disclosures and deposit contracts for specific features, a key one being the right to withdraw interest at least quarterly (preferably monthly).

PenFed passed this test, allowing me to automatically transfer interest monthly to my savings account there.

I also check whether my executor can withdraw my money, without penalty, if I die.

I couldn’t find this feature on its website but guessed PenFed had it. (I was right.)

Finally, when applying online rather than in person, I like to establish a small “trial” CD – if minimum deposit requirements permit.

I do this to investigate potential system glitches (such as burdensome identity verification) or problems with the CD product (such as a delay locking-in the rate until funding) before I go ahead and invest “real” money.

This usually requires discipline because I’m normally in a rush, lest rates move against me.

It was easy, though, with PenFed.

It has a modest minimum deposit of just $1,000, and I only had a small amount of cash available at the time.

My trial application went smoothly, with my rate guaranteed when I applied.

PenFed did do a “hard” credit pull, but that didn’t delay the process.

Now, I’m all in, ready to siphon funds from CDs maturing elsewhere into PenFed CDs.

I just hope its 3-year offer continues for a while.

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Comments (2)
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  1. gerald said:
    on November 24th at 10:24 am

    and i thought i was bad,,you have me beat big time,,with all those accounts,,funny isnt it,sometimes i think, exactly where is my money????

  2. Charles Rechlin said:
    on November 26th at 10:39 am

    Update: A CSR told me this morning that the 1.61% APY for 3-year CDs is good at least until the end of the month. (The website language is kind of mushy on this point.) I also learned that, as a new member, I could only fund a maximum of $25,000 per day by ACH, and that any higher amount would require a wire transfer into my savings account. It’s an imperfect world.