PenFed CD rates keep on dropping

[Green456]

I noticed in the past couple of weeks that PenFed decreased their CD rates. Currently their 1 year CD is 2.25% vs Alliant 2.7%. Even their 3 year CD is below average at 2.5% vs BECU which is now 2.68%.

I remember them being more competitive.

[Revelate]

Mortgage rates dipped too.

Maybe in your case two lenders isn’t enough

[Anonymous]

Penfed has been dropping more severely than most others, including NFCU which is still running a 2.65%/10 months promo. I do wonder why; I hope it's not a sign of any stability issues.

[Green456]

---

@Revelate wrote:
Mortgage rates dipped too.

Maybe in your case two lenders isn’t enough

---

I actually got 4 right now. Alliant, PenFed, BECU and Fort Knox. I am most likely going to end my membership with Fort Knox.

[DaveInAZ]

---

@Anonymous wrote:

Penfed has been dropping more severely than most others, including NFCU which is still running a 2.65%/10 months promo. I do wonder why; I hope it's not a sign of any stability issues.

---

Naw, the opposite - when banks/CU's lower savings rates when the Fed rates are stable it means they have more than adequate funds for lending. When banks offer unusually high savings rates that can be a sign of possible stability issues. I've had accounts at Penfed for several years, they've never offered particularly attractive savings rates.

[SBR249]

The 1 year treasury rates have also gone down in the past few months. 

If you look at the 1-year T-Bill rates at the beginning of every month in 2019:

01/02: 2.60%

02/01: 2.56%

03/01: 2.55%

04/01: 2.41%

05/01: 2.39%

05/24: 2.33%

Depending on PenFed's investing strategy, their investment could have a heavier mix of Treasuries and thus track Treasury rates more closely. 

[Namaste7]

I was bummed out by PF’s rate drops but SBR249’s explains the likely reason. Ironically, my other, super-conservative, local credit union has held strong at 2.7% for the 12-month CDs. I am committed to building a stronger deposit relationship with CUs this year; however, if I find their rates to lag or become inconsistent over the course of the year, I’ll have to reassess where to maintain my ST savings.