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WaMu's New 7.00% Savings for Success Account

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Update 1/16/08: The 7.01% APY has been reduced. The new yield is 6.5% APY in Illinois, Georgia and Texas and 5.5% APY in Washington State. It's still not being offered outside these 4 states. Please refer below for the program features.

Update 1/17/08: WaMu now has a Savings for Success webpage. Note, it may not show for states outside of TX, IL, GA and WA.

Washington Mutual has just started rolling out a new account called Savings for Success. It's not listed on WaMu's website. A reader saw it being offered at a Chicago branch, and emailed me info on this. I just called WaMu and received some additional details. This new account is designed to help small-time savers. The minimum deposit is $1 and the maximum deposit is $500. Then each month you can add between $25 to $500 a month by automatic transfers from your WaMu checking. The yield of 7.00% APY is guaranteed for 12 months. At the end of the 12 months, the money is moved into a WaMu sweeps account where you can start the Savings for Success account again (at a new rate) or transfer it out. During the 12 months, it's like a CD in that early withdrawal penalties apply. A WaMu checking account is required.

I was told on the phone that the 7% Savings for Success is available to anyone in Illinois or Texas if you open by phone. It's also available by phone for those in Georgia and Washington State, but the yield is only 6% APY. The banking rep said this program will start being promoted in September, and eventually rolled out to the rest of the nation.

Since you're limited to how much you can invest at 7%, it's not the best deal especially for those with large deposits. The reader who mentioned this program to me, calculated that you would make about $67 over a 5% savings account if you max out the deposits through the year.

More info about this is available by calling WaMu at 800-788-7000. If you find additional info, please leave a comment.

Update 8/2/07: A reader emailed me some important information:
A checking account is required in order to open this account. However... do not open an "Online Savings" (advertised at 5% APY) because you can't have that linked to your checking while at the same time doing Savings for Success.

After allowing for about a five day hold in funding your checking account, you can call to open the SFS account. A second "sweep" savings account (about 2% APY) needs to be funded with a minumum of $5... but this can not be "Online Savings." You can still have the online savings account, but it can not be linked with checking, thereby losing the promotional 5%. Yes, very confusing!

So it looks like you can't do both the Savings for Success Account and the 5% no-minimum savings account. If you want to do the 5% savings account instead, please refer to this post.

WaMu also has a decent deal with a 5.35% APY online CD. The 5.35% APY currently applies to terms from 6 to 60 months. There's also a few days left to take advantage of WaMu's 5.45% APY 10-month Add-On CD. However, this is only available in certain states (see post).

Thanks to reader Vadim who emailed me the info on this, and the reader who sent me the email on 8/2/07 about the savings account details.

Program Features (Updated on 1/16/08)

The features listed below are from a pamphlet that I received from my WaMu branch. WaMu hasn't posted this program online. For the official details, please check directly with WaMu.
How it works: First, open a WaMu checking account; next, open a WaMu Savings for Success account, and link them together. Then set up automatic monthly transfers from your checking to savings for the rest of the year (11 transfers). Do not make withdrawals during the first year. After 12 months, your funds will automatically sweep to a linked savings or money market account (also set up at account opening - no fees while linked) and you have the option to renew at new interest rate or close the account without paying a penalty fee.

Minimum/Maximum opening balance: $1 (Note: Your opening balance counts as your first month of savings) The maximum opening deposit is $500.

Monthly service charge: None

Term: 12 months

Balance tiers: None

Interest rate/APY: Fixed for 12 months (I was told today that it's 7.01% APY in Texas)

Minimum and maximum monthly transfers: Minimum - $25/month, Maximum - $500/month, One automatic transfer will be made each month. You can change the amount from month-to-month as long as your transfer hasn't been made yet.

Withdrawals: At end of account term, death, or disability; otherwise, you have to pay a penalty fee if a withdrawal is made before the 12-month anniversary date.

Renewal: Funds sweep to sweep account and automatic renewal of Savings for Success after 12-months.

Grace Period: You have 10 days after anniversary date to close account without penalty
  Tags: Illinois, Texas, savings account

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Comments
14 comments.
Comment #1 by Sree (anonymous) posted on
Sree
First of all, Banking guy, please accept your help in gettong more $$ on our $$, also please pass on my thanks to Vadim for giving this info to you and for all.
I just called the WaMu, its available in CA also. There is 3 months penalty for ealy withdraw.
You can add more money(up to the total $500) during the month by calling the CSR. There will be 10 days grace period to close it on the first year end.
More details to come.. I will open it in the next one hour.. :-)

1
Comment #2 by Sree (anonymous) posted on
Sree
I will take one of my above comment back. This account is not available in CA, the CSR gave me the wrong info, when I went to the branch, the manager told me that it will come to CA next year..

1
Comment #3 by Anonymous posted on
Anonymous
For a max of $500, who cares about the interest? $35 per year, for an
account that has a lot of strings?
Thanks, but no thanks.
(less than $35, if your average
on deposit is less than $500)

1
Comment #4 by Vadim (anonymous) posted on
Vadim
I should have asked if it's only one "Savings for Success" account per person. It was not mentioned anywhere and it would be great if you can open up a few of these.

1
Comment #5 by Vadim (anonymous) posted on
Vadim
In reply to anonymous, it's $500 max to open, but then you can add $500 every month so you have have $6000 of your own money in there plus interest. At the end of the year the total will be about $6232.

1
Comment #6 by Anonymous posted on
Anonymous
Thank you for this information. I just opened my account. Everything was smooth even though it was the first account of this type opened by the rep. He kept putting me on hold to consult some one.

1
Comment #7 by Anonymous posted on
Anonymous
I just opened my account. It was the same with my rep opening the 1st type of this account. Overall, pretty smooth process to get it started.

1
Comment #8 by Anonymous posted on
Anonymous
I have also opened an account and seams great! Though I wish I had opened the online savings frist so that I would get the 5%. I opened a new savings at the bank and am only getting 2%. That still beats the junk savings of .25% that I used to have.

1
Comment #9 by Anonymous posted on
Anonymous
One more detail. When you open this account, you end up opening two accounts with two different numbers. One is called sweep account and the other is a CD account.

1
Comment #10 by Anonymous posted on
Anonymous
Thank you very much for your detailed blog on this new account Wamu is offering. Only one account can be opened per person, but you can set up these three accounts and also go online and open an additional free checking to get an online savings account with 5%. The savings for success is only available for 4 states currently, Texas, Illinois, Georgia and Washington. I am an account executive for Wamu and can open these accounts by phone. For questions, please call Laura @ 1-800-933-3590 ext. 2265. Thanks again!

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Comment #11 by jake m (anonymous) posted on
jake m
I was told you can open AS MANY OF THESE accounts as you wanted.
Also it IS a good deal if its newly earned money.
And YOU CAN link it easily to a WAMU online savings account by simply setting up a WAMU checking account too, and setting up automatic xfers from the savings account to the checking account (which is what I did) to occur a couple of days before the $500 is to be taken out of the checking account. I have $500 of my paycheck automatically put into the savings account near the end of each month and it works fine that way.

1
Comment #13 by Anonymous posted on
Anonymous
I just completed the Savings for Success CD and it was awesome. I am proud of being able to have completed this and not have struggled since, all i had to invest monthly was 25 bucks (up to 300). Too bad WaMu is dead and Chase isn't offering this anymore, or else I would have done it again...no doubt about it :)

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