Pentagon Federal Credit Union upped the rate on its 5 and 7 year CDs (called money market certificates by PenFed) to 3.04% APY, the first return to 3% in a long while for the 5 year term. That is by far the best 5 year CD rate (check table) with CIT Bank offering the next highest rate at 2.05% APY. The 3% rate is also available in a 7 year money market certificate. In general, I have been arguing against longer-term CDs because I believe that rates are on the rise and it doesn't make sense to lock-in for a long term at a lower rate. But 3.04% is pretty attractive and savers looking for a little extra yield may find this worthwhile. The average 5 year CD rate is 1.079% APY and the BestCashCow Savings Booster Calculator shows that moving money into the PenFed 5 year CD will result in an additional $8,255 in savings on $50,000 over a 10 year period.
Almost anyone can join PenFed. Membership is open to those serving in the military or veterans as well as those belonging to a qualifying organization. In general, anyone can become a member by joining one of the participating organizations for a nominal fee. Organizations open to all individuals include National Family and Military Association ($20 one-time fee) or Voices for America's Troops ($15 one-time fee). This is a two for one as you can join worthy organizations and also be eligible to become a PenFed member and take advantage of their competitive rates.
Share Certificates can be opened online, via phone or at a PenFed branch.
Pentagon Federal Credit Union is the third largest credit union in the United States with over $15 billion in assets. All deposita re NCUA insured up to the limit of $250,000 per individual.
Thanks to Shorebreak for letting us know about this rate increase!