Penfed Premium Online Savings

[gdale6]

Hi all,

Thinking of opening up one of these accounts. Anyone have one that can share their experience with it. Thanks in advance.

[Revelate]

No direct experience, but 1.65%?

Realistically should be CD laddering that or something in 12 month increments at 2.35% over that just looking at the Penfed savings page.  I don't know, my general opinion about savings acounts are do something different with the money as 1.65% doesn't even break even with inflation right now.

[CramEiko]

I just parked some money in a 12 month CD at 2.35%. I was making .0000000001% sitting in my Chase Savings account. Besides PenFed is now at 2.45% for the same 12 month CD. Locking it in for longer doesn't make sence to me either as all the rates have been moving up lately. So if you can park some savings to the side why not? The big banks aren't even close except Capital One 360 at 2.4% for a 12 month CD.

[Tazman81]

I have their Premium Online Savings account open.  A couple of nuances:

1. You must fund the initial minimum deposit of $5 from an outside institution.  You cannot pull from a current PenFed checking or savings account.  (yes, baffled me as well, I even spoke with a rep)
2. Transfer from a PenFed account are credit to the balance immediately to start earning interest, but will not be part of your Available Balance for 6 business days

When you apply online, if you are already a PenFed member, the account opens instantly.  Also, if you have the PowerCash Rewards card, then you can push your rewards to this account.  It is typically credit the next day and doesn't follow the same 6 business day hold mentioned above.

[Anonymous]

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@Revelate wrote:

No direct experience, but 1.65%?

Realistically should be CD laddering that or something in 12 month increments at 2.35% over that just looking at the Penfed savings page.  I don't know, my general opinion about savings acounts are do something different with the money as 1.65% doesn't even break even with inflation right now.

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Some people like the flexibility of the savings account so they can easily grab some money when it's needed. 

Realistically, one who wants to put their money away for over a year should be investing it and getting a 3%+ return on it plus dividends. 

[Anonymous]

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@Revelate wrote:

No direct experience, but 1.65%?

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I did the math on my 12-month ladder. With the rate increases we've been seeing over the last year, I would've done just as well leaving my money in savings all along. The rate increases could always slow down or reverse, but they could also increase more quickly as well.

[minski]

I thought about putting money away into CDs but like you said, GrasshopperStudent, with the rate increases we've been seeing, I am hesitant to do so until they slow down.

[DaveInAZ]

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@Anonymous wrote:

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@Revelate wrote:

No direct experience, but 1.65%?

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I did the math on my 12-month ladder. With the rate increases we've been seeing over the last year, I would've done just as well leaving my money in savings all along. The rate increases could always slow down or reverse, but they could also increase more quickly as well.

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Yep. I wouldn't touch a CD right now for any duration. Not at all being political here, but the recent tax cut will raise the federal deficit over a trillion dollars this year. And foreign governments hold huge amounts of U.S. Treasury debt. Russia is already dumping their holdings of t-bills over sanctions, China holds a huge amount and may lighten their holdings over the tariffs. With more debt and fewer buyers interest rates could increase quickly.

As for the Penfed premium savings, I have their regular savings that only pays one or two tenths of a percent, but I only keep a hundred bucks or so there to maintain membership for my HELOC. Even my Memory Bank checking account with unlimited transactions pays almost as much as Penfed "premium" savings.

[DaveInAZ]

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@Tazman81 wrote:

I have their Premium Online Savings account open.  A couple of nuances:

1. You must fund the initial minimum deposit of $5 from an outside institution.  You cannot pull from a current PenFed checking or savings account.  (yes, baffled me as well, I even spoke with a rep)
2. Transfer from a PenFed account are credit to the balance immediately to start earning interest, but will not be part of your Available Balance for 6 business days

When you apply online, if you are already a PenFed member, the account opens instantly.  Also, if you have the PowerCash Rewards card, then you can push your rewards to this account.  It is typically credit the next day and doesn't follow the same 6 business day hold mentioned above.

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I missed this little tidbit above ^^^^. I've been a member since May 2017, and remember all too well the royal pain it is for the first 6 months with limits & holds. I had Share, Checking & PCR card on opening and then a Home Equity LOC. When I got the PayPal 2% MC in 2018 with much higher CL than PCR I decided PCR and the checking weren't worth it and closed them and reduced the Share to a bare minimum. If I didn't have the HELOC I would closed everything, but the HELOC is pretty good, Prime+0% (currently 5.5%) for up to 80% LTV, and I was approved for the interest only minimum payment option, and LOC is good for 15 years.

But yesterday I decided to open the Premium Online Savings to strengthen my relationship. Yep, surprised that the only funding option for the new account was an ACH from an external account - or mail them a check! - so I pulled $10 from my local CU and got the account opened. Then I moved in $1k from the HELOC. So today I check and see the balance is $1,010, but the Available Balance is $0.00. So I call, thinking maybe the $10 external initial funding needs to clear before everything is available. Nope, the rep tells me the 6 day hold for funds from any Penfed account. "For every new transfer, even from a Penfed account???" I ask, incredulous. "Yes".

OK, so the new "Premium" Savings will be closed next Tuesday Feb. 5 when my funds from another freaking Penfed account are released and I can transfer the funds out. I have accounts with higher interest, and don't/won't have any accounts with this kind of ridiculous hold on funds.

It's really, really hard to like Penfed.

[SouthJamaica]

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@DaveInAZ wrote:

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@Tazman81 wrote:

I have their Premium Online Savings account open.  A couple of nuances:

1. You must fund the initial minimum deposit of $5 from an outside institution.  You cannot pull from a current PenFed checking or savings account.  (yes, baffled me as well, I even spoke with a rep)
2. Transfer from a PenFed account are credit to the balance immediately to start earning interest, but will not be part of your Available Balance for 6 business days

When you apply online, if you are already a PenFed member, the account opens instantly.  Also, if you have the PowerCash Rewards card, then you can push your rewards to this account.  It is typically credit the next day and doesn't follow the same 6 business day hold mentioned above.

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I missed this little tidbit above ^^^^. I've been a member since May 2017, and remember all too well the royal pain it is for the first 6 months with limits & holds. I had Share, Checking & PCR card on opening and then a Home Equity LOC. When I got the PayPal 2% MC in 2018 with much higher CL than PCR I decided PCR and the checking weren't worth it and closed them and reduced the Share to a bare minimum. If I didn't have the HELOC I would closed everything, but the HELOC is pretty good, Prime+0% (currently 5.5%) for up to 80% LTV, and I was approved for the interest only minimum payment option, and LOC is good for 15 years.

But yesterday I decided to open the Premium Online Savings to strengthen my relationship. Yep, surprised that the only funding option for the new account was an ACH from an external account - or mail them a check! - so I pulled $10 from my local CU and got the account opened. Then I moved in $1k from the HELOC. So today I check and see the balance is $1,010, but the Available Balance is $0.00. So I call, thinking maybe the $10 external initial funding needs to clear before everything is available. Nope, the rep tells me the 6 day hold for funds from any Penfed account. "For every new transfer, even from a Penfed account???" I ask, incredulous. "Yes".

OK, so the new "Premium" Savings will be closed next Tuesday Feb. 5 when my funds from another freaking Penfed account are released and I can transfer the funds out. I have accounts with higher interest, and don't/won't have any accounts with this kind of ridiculous hold on funds.

It's really, really hard to like Penfed.

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It's just a temporary thing because it's a new account.

In some contexts PenFed gives me the fastest availability of any institution I have ever seen. E.g., when pulling a payment from an external account PenFed treats the payment as having arrived instantly and immediately credits the full amount of the payment to me, even though the ACH debit request hasn't even been received by the institution from which payment is being pulled. 

Yes it has a few peculiarities, but overall I think it's a valuable arrow to have in one's quiver.