alex.moskalyuk

For a fairly liquid high-yield money-parking option check out Pentagon Federal Credit Union, which is currently offering FDIC-insured certificates of deposit at 6.25%. The catch is that their smallest term is 3 years, and breaking the CD opened for a term up to 5 years requires forfeiting 180 days’ worth of interest, but the 180 day interest loss is pretty typical for any of the longer term accounts.

The promotion runs till January 31st, 2007, and the minimum to open a CD is at $1,000, while the maximum is at $10,000. To join Pentagon Federal Credit Union, your or one of your family members (doesn’t matter if it’s grandpa’s uncle’s adopted half-brother) have to be in the US military. Alternatively, you can join NMFA for a quick membership fee of $20. Joining Pentagon Federal Credit Union will offset you another $5, since you need to get a basic savings account with them, and $5 is a minimum balance to keep the account open. You can pay the fee of $25 (if you choose to join NMFA) right on PenFed site, but be careful to pay with your debit card, not credit card, as all credit card transactions are treated as cash advances, and therefore subject to (usually high) fees from your friendly credit card issuer.

The application process is pretty straightforward, and if you have a debit card with $25, you will be a PenFed member in less than half an hour. After that you need to call them up to establish your online PIN as they verify it’s indeed you. The process takes less than 15 minutes. With online PIN you can set up a username+password for penfed.org and apply for a CD as well as immediately fund it from external checking or savings account.