Dedicated to Deposits: Deals, Data, and Discussion

4.00% 12-Month / 3.60% 8-Month Online CDs at WaMu

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Update 9/26/08: WaMu closed. JPMorgan Chase acquires WaMu's banking operations. Please refer to this post for more details.

Update 7/24/08: Please refer to this more recent post for new higher-rate CD specials from WaMu.

Washington Mutual just recently increased the yield on several of its Online CDs. The two most competitive rates are a 3.60% APY 8-month CD and a 4.00% APY 12-month CD. The 24-month and 36-month CDs also have a 4.00% APY. The 60-month CD has a 4.50% APY. The minimum deposit is $1,000.

Every now and then WaMu bumps up the rates on these Online CDs. In December WaMu was offering a 5.10% 6-month Online CD.

When I called WaMu last year I was told that you can fund the Online CD with an ACH transfer from another bank. You'll have to supply the bank's routing number and your account number. You can also have the money transferred from your existing WaMu savings or checking account. For this second option, I was told that you must first log into your account, and then open the CD. This will allow you to link the CD to your account and fund it with a transfer from your WaMu savings or checking.

In the previous post, commenters had mentioned being told that WaMu gives your 30 days to fund the CD and still receive the yield at the time of the application. This seems to have changed. At the bottom of WaMu's rate table it states:
To obtain the APY for the effective date on the day you apply, the Online CD account must be funded within seven (7) calendar days.

When the CD matures, there's a 7-calendar grace period in which you can close the CD without penalties. A reader described a nice online feature at WaMu that can make closing a CD easy if you have a WaMu checking or savings account:
when a CD matures, on the account summary you will see a big bold text saying: "This CD has reached its Maturity Date!" under the matured. They give you a bunch of information and even let you close and transfer to your checking/savings.

They don't seem to allow an ACH transfer to your bank account outside of WaMu.

WaMu Online Savings and Free Checking Account

So if you decide to open a WaMu Online CD, you might also consider their Online Savings Account. It currently pays 3.30% APY, and it has no monthly fees or minimum balance requirements if it's linked to WaMu's Free Checking account. The Free Checking also has no monthly service charges. It has several nice features such as free checks and free outgoing wire transfers worldwide (which can come in very handy to fund CD's at other banks).

Savings for Success Update

And if you open a WaMu checking, you may want to take advantage of WaMu's Savings for Success. It's not available in all states, so the webpage may not show anything if you enter a zip code in a wrong state. The last I checked, it was available in Texas, Illinois, Georgia and Washington State. The current yield for Texas is 5.00% APY. This used to be 7%, but it has fallen over the last year. The current rate is high, but the problem with the program is that you're limited to how much you can put into the account. You are only allowed to transfer a maximum of $500 a month for 12 months into this account. For details about this Savings for Success program, please refer to this previous WaMu deals post.

WaMu in the News

WaMu has been hit hard by the crises in the mortgage and credit markets. In latest news, WaMu's president of the retail banking unit has left the company reportedly "to pursue other career interests." Last month, WaMu was able to receive approval for a $7 billion infusion of capital by a group of institutional investors. It needs the additional capital because of mounting losses in its loan portfolio, especially from risky mortgages.

As I recommend with any bank, make sure you stay under the FDIC limits. WaMu is FDIC insured under two banks (Washington Mutual Bank FSB and Washington Mutual Bank).
  Tags: CD rates

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Comments
8 comments.
Comment #1 by Anonymous posted on
Anonymous
I ask this question under the comments of the IndyMac post but since I didn't get any replys I thought I would try again here. Will most banks or some banks or no banks allow you to specify at time you buy a cd that you do NOT want it renewed at maturity and you want a check issued to you on the maturity date. There are several things I don't like about cd's but the renewal clause is the main one. This clause benifits the bank and in no way benifits the holder of the cd unless I am missing something here. If this is a dumb question please answer anyway and consider the source.

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Comment #2 by Anonymous posted on
Anonymous
From my experience, banks will not permit you to specify at the time you open a CD that you want the proceeds mailed to you at maturity rather than have the CD renewed. However, what I have done without any problem is contact the bank a couple of weeks prior to maturity, thru their website bank mail or in writing by regular mail (depending on the bank's requirements) with instructions to close the CD at maturity and distribute the proceeds to me. If I have a checking account at the bank, I usually have the proceeds of the CD transferred into that account at maturity. That way I can deploy the money right away instead of having to wait for a check in the mail, which could take several days.

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Comment #3 by Anonymous posted on
Anonymous
You may not specify that you do not want the CD renewed at maturity. Just pick it up at maturity, you usually have 7-10 days grace period. My last CD is for 3 mo. and it had that clause about renewing at maturity and the Rep told me to come in at that time and make my request, or telephone.

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Comment #4 by Anonymous posted on
Anonymous
I have found that it depends on the bank. My local bank and credit unions have all followed my wishes and put them in my savings accounts at maturity. They usually make a note at the time of opening and do it.

I haven't had much experience with online CD's, but most seem to say they will automatically roll over unless you contact them.

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Comment #5 by Anonymous posted on
Anonymous
I think the Wachovia deal is much better.
Their rate on the 12 mth is 4.25% and 4% with just 7 mths of locking.
Plus it is available online, through their branch network and over the phone.
http://www.wachovia.com/savings

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Comment #6 by Anonymous posted on
Anonymous
What is WAMU's basic rule for adding to a CD after it has been opened? I seem to recall CD's over 1 year allowed adding funds upto the original CD amount and that would keep the same rate and maturity.

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Comment #7 by Banking Guy (anonymous) posted on
Banking Guy
WaMu does have occasional Add-On CD specials that allow adding to the CD up to the initial deposit. However, I don't think most of their CDs have this feature.

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Comment #8 by Anonymous posted on
Anonymous
So when one closes a WAMU CD who doesn't have a WAMU checking account then the bank sends you a check via mail or can one get it wired out to your bank?

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