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.

Membership Eligibility
See how to join. Anybody can join by paying a one-time $20 fee to a non-profit organization National Military Family Association (NMFA).

CD Promotions
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. It also has no early withdrawal penalty for investors over 59-1/2.

Mortages
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.