Dedicated to Deposits: Deals, Data, and Discussion

5.00% 13-Month CD at WaMu

POSTED ON BY

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

Washington Mutual will be coming out with a 5.00% APY 13-month CD. This is scheduled to start tomorrow (8/23/08) and to last for one week. A reader mentioned hearing about this at a local branch yesterday, and I just confirmed this with a WaMu CSR this afternoon. According to the CSR, this will only be available at a branch or by phone. It'll be the typical WaMu CD with a $1,000 minimum deposit, with no checking requirement and with no add-on feature.

According to the CSR, it won't be offered as an Online CD. We'll see tomorrow if that is the case. Currently, WaMu is offering very competitive 12 and 13-month online CD yields of 4.50% APY, plus a 4.25% APY 8-month CD (see post). There's also a 4.25% APY 8-month CD that's available by phone or branch that has an add-on feature (see post).

Update 8/23/08: The 5.00% APY is now listed at WaMu's Online CD page for both 12 and 13-month terms. For details about WaMu's Online CDs, please refer to this post. Refer to my post on FDIC facts for links and references. Based on FDIC documentation and recent examples from IndyMac's closure and other bank closures, there seems to be no risk for those who stay under $100,000. If you don't agree, please post links to your sources in the comments.

If it's like their typical non-online CDs, these may only be available in certain states that have WaMu branches. These include AZ, CA, CO, CT, FL, GA, ID, IL, NV, NJ, NY, OR, TX, UT and WA.

In addition to these CDs, WaMu is offering a 3.75% APY on its Online Savings Account which makes it one of the top nationwide savings accounts (see post).

Sign of Desperation?

Is this a sign that WaMu is desperate for deposits? WaMu has been suffering from billions of dollars in loan-related losses in this mortgage crisis. According to this article by Mike "Mish" Shedlock, "Washington Mutual (WM) is on the brink," and it is unable to raise capital. Although I should point out that Shedlock includes several major banks on his on-the-brink list. Perhaps these other banks will follow WaMu with their own 5%+ CDs. The predictions made in this BestCashCow article are proving true.

As I recommend with any bank, it's best to stay under the FDIC limits (see post).

Bank deposits at WaMu are FDIC insured under two banks: Washington Mutual Bank FSB and Washington Mutual Bank. Washington Mutual Bank appears to be the main bank which holds most of the deposits.

Thanks to the readers who emailed me and commented on this new CD.
  Tags: CD rates

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Comments
24 comments.
Comment #1 by scott (anonymous) posted on
scott
For new Customers they do a hard pull if opened online or over the phone. Because of that I have been unable to open with them due to having a security freeze on all my reports. I called and was told it's Equifax they pull from so am unlocking that today to be ready

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Comment #2 by Michael (anonymous) posted on
Michael
I just opened a WaMu CD yesterday. I did the 4.5% 12 month. Why not? FDIC has my back if they go under. And it is my opinion that if Wamu does go bankrupt, it will be bought up, much like BoA bought up Countrywide.

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Comment #3 by Anonymous posted on
Anonymous
Confirmed this deal with my local Wamu branch in Boca Raton, FL.

CSR said it's in-branch only, and that it's only good till 8/29 ... unless it gets extended!

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Comment #4 by Anonymous posted on
Anonymous
too bad! I just opened 1 CD in a branch this afternoon, and I wasn't told anything about waiting for a day for a better rate CD :(

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Comment #5 by Anonymous posted on
Anonymous
WaMu is already technically insolvent and the odds of them going under are huge - probably worse than flipping a coin. Why the hell do you think they are stretching so much to get money in the door? It's to boost their balance sheet. And if FDIC covers yours back, they cover your principle, not lost interest, never mind the fact that you might end up having to wait a long time to get your money. If you put any money into this CD, be god **** sure it's money you can afford to not need touching right away, and be under your total FDIC limits (high net worth individuals may have problems - do your own homework)

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Comment #6 by Anonymous posted on
Anonymous
I have 2 WaMu CDs maturing next week, so I hope this is not just new money.

And to "Anonymous 8/22 8:07 PM" - Why do you say that you will lose interest and wait a long time for your money if the FDIC takes over? I got my principal AND interest immediately at IndyMac. Why would WaMu be any different as long as I'm under the limit?

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Comment #7 by Anonymous posted on
Anonymous
Now it is available for online application. In addition, there has 12-month 5%

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Comment #8 by procol (anonymous) posted on
procol
Nice of these idiots to not mention anything when I was in today to close a cd. I did not open a new one at the 4.5 rate , fortunately.

These guys are sweating for $ like a a junkie looking for a fix.

I may or may not open one of these as I'd rather not deal with fdic if I can help it.

To Anon, what makes you think that interest accrued is not covered by FDIC?

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Comment #9 by Mocirne (anonymous) posted on
Mocirne
The FDIC covers everything (principal and all accumulated interest) so long as the combined sum is <= $100,000. If WaMu does go under (which the government will never allow, as the unimaginably large payoffs from the uninsured deposits will likely bankrupt the insurance pool) the payback from the FDIC is not painless in any way. As we've seen from IndyMac, you either receive your check in the mail within a few days, the account is retained under the existing account conditions, or the account is bought out by another bank and the above choices are played out again.

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Comment #10 by ShraZZy (anonymous) posted on
ShraZZy
12-month & 13-month online CD are 5%, no need to go to a branch office.

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Comment #11 by Anonymous posted on
Anonymous
This is a great deal. FIDC insured with a very high rate for a one year CD (or 13 month.) This certainly fits my needs. What's the worst that can happen? um....

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Comment #12 by Anonymous posted on
Anonymous
I had to hunt around for clarity on FDIC coverage. I was told by another bank that FDIC would not or is at least not required to cover interest or pay interest should a bank fail. The link below makes it clear you get interest and prinicpal.

It is still not clear to me if they are required to continue to pay interest - I don't think they are, which is what the CSR for this other bank was trying to convey - you can invest now, but if it fails you'll have to reinvest at whatever the current rates are. I'm splitting my CD's between Key Bank and WaMu - can't beat the free ipod touch and 4.5/5.0 for 13/23 month CD's.

http://www.fdic.gov/consumers/banking/facts/index.html

What is the FDIC insurance amount?
The basic insurance amount is $100,000 per depositor, per insured bank. This includes principal and accrued interest up to a total of $100,000. The $100,000 amount applies to all depositors of an insured bank except for owners of certain retirement accounts, which are insured up to $250,000 per owner, per insured bank.

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Comment #13 by Mocirne (anonymous) posted on
Mocirne
Anon @ 9:32, the FDIC is required to continue paying you interest if they decide to keep the account open at its existing rate and term length. If they decide to close it, you will receive the full payout, and if they decide to change it, you will be given the option to do so, or to close it out and again receive the full payout.

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Comment #14 by Anonymous posted on
Anonymous
The branch has the term on the 5% special as between 13 and 17 months.

The rate hot sheet listed it as being the top rate with no discretion allowed. Purpose was for retention and new money. No surprise there...

Branch Manager stated this special will end Aug 29th and that it was unusual for them to provide an end date.

Staying under the FDIC limits...hopefully it wont matter, and I'm sure they'll figure out the mess before I could tap these funds w/o early withdrawal penalty anway.

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Comment #15 by trinidon2k (anonymous) posted on
trinidon2k
Once you open the account, how long do you have to fund it? When I opened my Countrywide account, I had 10 days to fund it.

Can you fund the WAMU account using ACH Pull?

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Comment #16 by Anonymous posted on
Anonymous
Great deal, I just emptied out one of my 5% rewards checking accounts.
I'll just put the transactions on my cash-back credit card instead.

Sure Wamu is the large bank most likely to fail, but I don't think FDIC altered the terms of Indymac CD's. Does anyone know?

In any case, FDIC has a good track record of getting insured deposits back to you fast if they aren't sold to another bank.

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Comment #17 by Anonymous posted on
Anonymous
For the last few 3 days I am unable to open a new CD with Wamu and take advantage of the Rate 4.5 or now the 5 percent. I currently have an account log on select new account and go through the processd by entering my drivers license birthday , social to be told that the Server is down to try again later thats now 3 days with this error . The email customer service tells me the same thing delete my cookies and temp files which I have , I have tried other computers no such luck. Anyone having this problem. I would like to take advantage of this 5 percent cd they having.

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Comment #18 by Anonymous posted on
Anonymous
The CD can also be opened by phone or in person. Is there some reason you can't use one of those options instead?

I seem to remember from various discussions when WAMU first released its online savings account, that people were told that if your attempt to establish on online account fails for some reason, you are locked out for a week or so. Each additional attempt just extends the lockout period. This was especially frustrating to people who attempted to apply when some part of the WAMU systems was down (like late at night): They would get through putting in the info and get an error message that said "try again later" and find themselves locked out. Apparently no one can override the online lockout period.

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Comment #19 by Anonymous posted on
Anonymous
** I just tried to sign up for a CD and now it says you have to wait 7 days to try again. The promo will be over by then.. Normally it would give me a server error. I guess they dont want my Money!

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Comment #20 by Anonymous posted on
Anonymous
"** I just tried to sign up for a CD and now it says you have to wait 7 days to try again. The promo will be over by then.. Normally it would give me a server error. I guess they dont want my Money!"
By Anonymous, at 10:25 AM, August 24, 2008
Oh shut up and stop posting unless it is of some importance. I Hate when I come and read posts of some idiot that cant tell his right from his left. if you are having a problem it has been stated before that you can call or show up in branch. Believe me they wont fail just because they didnt get your money they will fail when they cant come up with there next intrest payment on there cupids

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Comment #21 by ShraZZy (anonymous) posted on
ShraZZy
ya one time I made mistake in my signup and I couldn't open a CD for a week. So try again in a week and make sure everything you've entered is correct.

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Comment #22 by ShraZZy (anonymous) posted on
ShraZZy
Trinidon2k
You can fund from an external bank ACH

Minimum deposit to open and obtain APY is $1,000.00. 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. If received on or after the eighth calendar day, the then effective date APY will be applied.

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Comment #23 by Anonymous posted on
Anonymous
How long after opening can online savings & checking accounts be closed for no fee?

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Comment #24 by Anonymous posted on
Anonymous
Beware

I had a 7 month CD mature the B&M branch would only give me the 5% for 13-17 months but I wanted 12 months. So I had them transfer the money into my "free" checking account. I open the CD online for 12 months, $100,000 expecting to be able to have the interest automatically transferred to my checking account (monthly). I get no option for this while opening the CD. So I call. They tell me they can request it, but it wont take effect until after my first interest payment. So I will have over the $100,000 in the account. Then the CSR tells me I cannot pull out the interest w/o a penalty (I think she is wrong). Bottom line is they are making it MUCH harder than it should be.

Also - FYI - the CSR at the branch mentioned they are coming out with a REALLY high money market rate next week. I think it is 4%.

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