Pentagon Federal Credit Union officially announced some competitive new rates for their money market certificates (basically CDs, or certificates of deposit) starting December 1st, 2013. The minimum opening deposit is $1,000.
|Term||APY||Early Withdrawal Penalty*
(days of interest)
|2-Year CD||1.41%||Last 180 days|
|3-Year CD||2.02%||Last 180 days|
|4-Year CD||2.22%||Last 180 days|
|5-Year CD||3.04%||Last 365 days|
|7-Year CD||3.04%||Last 365 days|
Here is an interesting chart comparing the effective APY depending on holding period (taking into account the early withdrawal penalty) for the 4-year and 5-year CDs. We see that the 5-year CD (and 7-year CD) actually matches the 3-year CD held to maturity at the 3-year mark (both 2.02%) and is slightly better than the 4-year CD held to maturity at the 4-year mark (2.28% vs 2.22%). However, for some interim time periods (7 to 28 months) the shorter penalty will make the effective yield of the 4-year CD higher.