Wachovia has started advertising some of its Featured CDs in newspapers around the country including Denver, San Francisco and Florida. The ads show their 4.25% APY 12-month CD and the 4.00% APY 7-month CD. The minimum deposit is $5,000 ($2,000 minimum for an IRA CD). I first reported on these Featured CDs in this Friday post. If you've been following CD rates in the last few months, you'll know these are way above what other banks have been offering.
One thing to note in the ads is that there's no mention of the checking account requirement. I received conflicting info on this from two different Wachovia reps, so your miles may vary on this issue. Many readers in my previous post have mentioned being told by reps from their local branches that checking is required. Also, Wachovia's FAQ does state that Featured CDs require an existing or new Wachovia checking account. This is typical of past Wachovia CD promotions, but the first CSR seemed pretty confident that this new promotion was different.
Update 7/9/08: I received more confirmation from a Wachovia CSR today that these special CDs are available nationwide with no checking account requirement. She recommended against opening the CD online due to compliations (several readers have also reported problems with the online application). CDs can be opened by phone and can be funded by check or wire transfer.
The checking requirement isn't that bad since the Free Checking qualifies. A commenter from the previous post mentioned that he didn't receive a credit inquiry. In the past others have noted a hard credit pull, and this FAQ does state that Wachovia will verify your personal information and credit history with consumer reporting agencies.
Another reason you may want a Wachovia checking account is to take advantage of the Way2Save account in which you can easily make $72 more than you would earn in a 3% savings account in the first year (see my Way2Save review).
Wachovia's checking also has a $25 refer-a-friend bonus. Plus, keep a look out for new branches. They often have a $75 checking bonus.
The ad doesn't list all the Featured CD rates and terms. The website also doesn't list these, so these may vary based on your location. Below are the terms and rates that I was told on Friday based on zip codes in Texas, Florida, California and New York. Readers in my previous post have also confirmed these in Arizona, Georgia and Central Illinois.
Wachovia Featured CD Rates as of 6/20/08:
Early withdrawal penalties equal 90 days of interest for terms under one year and 180 days of interest for terms of one year and greater.
More Wachovia News and Speculation
As this Charlotte Business Journal reports, Wachovia has been hit hard in this mortgage mess. Its acquisition of Golden West Financial Group (parent of World Savings) proved to be a costly problem. The article repeated the CNBC speculation of a potential acquisition by JPMorgan, however, it noted there's a complication in such a merger. JPMorgan has 7 percent of US deposits and Wachovia has 6 percent. That would put the merged bank above the federal deposit cap that requires a bank not to have more than 10 percent of all US deposits.
With Wachovia being the fourth largest US bank by assets, it may be too large to fail in that the Fed wouldn't let it happen. Nevertheless, I would recommend staying below the FDIC limits. Wachovia describes how you can be FDIC insured on deposits above $100,000. I also have more info at this post. Wachovia's financials can be reviewed at their FDIC page.