5.80% to 6.00% 13-Month CDs at Washington Mutual
Aug 15, 2006 - 7:34 PM by Ken Tumin
Several readers have reported seeing high yield 13-month CDs being advertised by Washington Mutual in several areas of the country. In Dallas, WaMu is advertising 6.00% APY. In Tampa, they're advertising 5.80% APY. In New York and New Jersey, they're advertising 6.00% APY. These special certificates are not listed at WaMu's website. According to the ad, the minimum is $1K and it requires new money.
Here are some of the important details in the fine print of the Dallas ad:
The Tampa ad with the 5.80% CD has similar details. It only lists Florida for the availability. Both the Tampa and Dallas ad state that the offer expires 8/31/06.
I'm not sure how useful the bump-rate feature will be. The current standard 13-month CD rate for a $1K minimum listed at their Traditional CD rate page is 3.30% APY. But with a 6.00% APY, it's not really needed especially with the latest pause on rate hikes by the Fed.
WaMu is becoming very competitive lately on savings products. On Saturday I reported on their new 4.75% no-minimum savings account that can be opened online with their checking account. Unlike Bank of America, WaMu's free checking account is entirely free and has many useful features like free checks. They've been offering this free checking account since March. In addition to this latest CD promotion, WaMu has been offering competitive long-term CDs (60 to 83 months) with yields of 5.65% to 5.75% APY.
Hopefully, this will help make the major banks like Bank of America more competitive. As of June 30, 2006, WaMu is the 6th largest bank in the United States by assets, valued at $343.1 billion.
Here are some of the important details in the fine print of the Dallas ad:
Offer available in Connecticut, Georgia, Illinois, New Jersey, New York and Texas... Bump-Rate feature allows you to increase your rate/APY once during the term to our standard rate/APY (posted in Financial Center) for a CD of similar account type, balance and term; rate/APY may not be changed to a promotional rate available in special offer. Account must be opened at a Financial Center or by calling 1-866-808-1396.
The Tampa ad with the 5.80% CD has similar details. It only lists Florida for the availability. Both the Tampa and Dallas ad state that the offer expires 8/31/06.
I'm not sure how useful the bump-rate feature will be. The current standard 13-month CD rate for a $1K minimum listed at their Traditional CD rate page is 3.30% APY. But with a 6.00% APY, it's not really needed especially with the latest pause on rate hikes by the Fed.
WaMu is becoming very competitive lately on savings products. On Saturday I reported on their new 4.75% no-minimum savings account that can be opened online with their checking account. Unlike Bank of America, WaMu's free checking account is entirely free and has many useful features like free checks. They've been offering this free checking account since March. In addition to this latest CD promotion, WaMu has been offering competitive long-term CDs (60 to 83 months) with yields of 5.65% to 5.75% APY.
Hopefully, this will help make the major banks like Bank of America more competitive. As of June 30, 2006, WaMu is the 6th largest bank in the United States by assets, valued at $343.1 billion.
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Anonymous - #1, Wednesday, August 16, 2006 - 12:40 AM
WaMu is offering 5.85% APY in AZ, CA and NV as well. 13 month term, $1000 minimum. Bump rate. Call center number for more info is 1-866-808-1396.
BTW, this blog is very helpful. I found out about the World Savings "super secret" 6.01% deal here. Although I am a World Savings CD customer, I did not receive the mailing (I am a tad miffed at that).
Yours,
Bozo
Anonymous - #2, Wednesday, August 16, 2006 - 6:55 AM
Can you provide a link to a New York bank ad? Also, what is WaMu's rating as a financial institution?
Banking Guy (anonymous) - #3, Wednesday, August 16, 2006 - 8:38 AM
Can't find an online ad for New York and New Jersey. I was able to find the one for Arizona, California and Nevada here.
Anonymous - #4, Wednesday, August 16, 2006 - 5:15 PM
People are reporting that there is also an 18 month CD available at the same rate that does not require new funds.
Banking Guy (anonymous) - #5, Wednesday, August 16, 2006 - 6:29 PM
Yes, I've confirmed the 6% 18-month CD at my local WaMu branch. As you mentioned it does not require new money. Thanks for the info.
About WaMu's financial rating, I had some difficulty finding this. With info from the FDIC I was able to locate Bankrate's star rating. Surprisingly, it's a little weak at 3 out of 5 stars (performing)
Anonymous - #6, Thursday, August 17, 2006 - 9:07 AM
WTF is with the BudgetCents link in your sidebar? Sorry to be off topic but it's one of my favorite recommendations from you.
Anonymous - #7, Thursday, August 17, 2006 - 9:37 AM
At Washington Mutual, the early withdraw penalty on CDs over 36 months is 1 year, this is not listed on their web site.
Providian Bank is part of WaMu, this may account for their low financial score.
Anonymous - #8, Thursday, August 17, 2006 - 11:12 AM
FWIW I telephoned them today looking for the 18 month CD at 6% APY. This product exists but not for me. They are offering this term ONLY for existing customers having the funds already on deposit. I am not an existing customer of the bank. They offered me two alternatives:
They said I could open a 13 month CD at the same high APY of 6%.
They said I could deposit my funds into a checking account in order to become an "existing" customer with "existing" funds. Then I would be permitted to move the checking funds to an 18 month CD at the 6% APY, provided this be done before the end of August.
Bottom line if you are a new customer, or an existing customer without the funds already on deposit, you might find it easier to stick with the 13 month certificate.
Banking Guy (anonymous) - #9, Thursday, August 17, 2006 - 6:44 PM
Thanks for the info on these WaMu CDs. I didn't realize that the 18-month CD was only for current customers. I tried to find out the details on the early withdrawal penalty for the 13 and 18-month CD, but the CSR made it sound unusually complicated. I'll have to get more details on this.
BTW, about that BudgetCents link, I'm not sure what happened. It wasn't a PF type site anymore so I removed the link.
Anonymous - #10, Thursday, August 17, 2006 - 7:43 PM
Just got back from WAMU.
Lord these guys must be under heavy presssure to cross-sell. They will try to imply that you need to open everything from a checking account to a home equity loan to get this CD.
Just ask them point-blank "Is this required?" Stand your ground and remember that you are there to conduct your business on your terms and not to gain the approval of some snotty-nosed nineteen year old.
Banking Guy (anonymous) - #11, Saturday, August 19, 2006 - 1:31 PM
I just opened this 6% CD at a nearby WaMu center this morning. The branch manager opened it for me. She did ask if I wanted to open a checking account, but didn't push it when I said I may open it online to take advantage of the 4.75% savings (see post).
The manager said there's no hard credit pull for opening a CD or the checking and savings account. They only do a ChexSystem verification.
As has been reported, they don't offer this CD in an IRA.
If you purchase the CD on a Saturday, it won't begin until Monday. So you don't get 2 extra days of interest like at World Savings.
There is no maximum deposit limit. The manager said one person in another branch had deposited $1 million into this CD.
The early withdrawal penalties are not straightforward. I had to have the manager write down the formula. Here it is:
(withdrawal amount) x (interest rate) x (# days in term) / 365
For example, if you withdraw $10,000 after 180 days, your penalty would be:
$10,000 x 5.84% x 180 / 365 = $288.
Basically, you lose all of the interest on the amount that you withdraw. However, a partial withdrawal won't necessarily close the CD.
Anonymous - #12, Sunday, August 20, 2006 - 11:36 AM
I have used providian for many years,but since WaMu purchase I have been very disappointed with all contacts. I had 2 jumbo cds mature in last month and could not get any acceptable rates. Last week the cd depart. would not confirm the 13 mo. bump-up or the 18 mo offer.but only referred me to the web site offers and i live in Tex. Also to w/d cds at maturity they demanded signature guarantees with written instructions which takes another week-u can have WaMu!
Anonymous - #13, Monday, August 28, 2006 - 8:26 PM
Washinton Mutual is currently an "A" rated bank based off the two major credit rating agencies. The top ranking is "AAA".
AAA
AA
A
BBB
BB
B...
I work for WaMu in Seattle and has traditionally offered very low interest rates on products. Over the past 6 months they have been pressing to expand into the deposits area. Also offering higher rates is cheaper than selling bonds at 7.5%ish in the open markets.
Anonymous - #14, Wednesday, August 30, 2006 - 9:04 AM
Spoke with them this morning re the 6%, 13 month CD deal. This CD will not be offered after August. Tomorrow is the last day.
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