Dedicated to Deposits: Deals, Data, and Discussion

Rates Up at WaMu: 4.00% Online Savings Account, 5.00% 12-Month CD

POSTED ON BY

Update 9/26/08: WaMu closed. JPMorgan Chase acquires WaMu's banking operations. Please refer to this post for more details. Note: WaMu (under JPMorgan Chase) continues to offer these rates as of 9/28/08.

Washington Mutual increased the yield of its Online Savings Account from 3.75% to 4.00% APY today. Also, WaMu has brought back its 5.00% APY 12- and 13-month Online CDs.

With the current uncertainty at WaMu, it may seem strange to jump on these deals. You may want to consider what happened at Countrywide and IndyMac. After Countrywide was acquired by Bank of America, Countrywide Bank continued with competitive rates on it savings accounts. The rates are a little lower today, but the drop wasn't fast. For the case of IndyMac, it has been over 2 months since the FDIC took over IndyMac Bank, and IndyMac is still offering competitive yields on both its money market account and CDs. Those who stayed under the FDIC limits at IndyMac not only didn't lose anything, but also were provided extra flexibility since the FDIC-operated IndyMac allowed customers to do early penalty-free closures of their CDs. Many readers continue to report IndyMac matching 5% CDs. The latest match that has been reported is Dime Savings' 5% 6-month CD.

Latest WaMu news indicates that the Office of Thrift Supervision is pushing for a quick resolution with WaMu that may involve a deal to split WaMu's assets among several banks. But the article suggests that potential buyers would prefer to wait so there may not be a resolution to WaMu's fate for the next few months.

WaMu's Online Savings Account

Don't forget that the Online Savings Account requires that you link a WaMu checking account. Otherwise, you'll only get a low standard rate and will be subject to monthly fees. WaMu's Free Checking is also a good deal. It provides free checks for life and free outgoing wire transfers.

WaMu's Online CD

For details about WaMu's Online CDs including my experience opening one last month, please refer to this post.

WaMu and the FDIC

With the current situation, it definitely makes sense to stay under the FDIC limits. 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. This WaMu page provides more details of FDIC insurance and WaMu's two FDIC-insured banks. Note, there's no mention about the ability to have deposits under both banks to double your FDIC insurance. I've contacted WaMu by phone and email, and I have not been able to get any details about if you can hold deposits under both FDIC charters. Some readers have reported being able to do this at a WaMu branch. Please leave a comment in this post if you had success with this.

For other ways to extend your FDIC insurance coverage above $100K (along with the associated risks), please refer to this post, Extending FDIC Coverage Past $100K, and this post, POD Accounts and FDIC Coverage. For facts and misconceptions about the FDIC, please refer to this post.

To review all of my recent WaMu posts, please refer to this page. WaMu continues to offer Traditional 5% CDs for terms of 48-months and longer (see post).

Related Pages: CD rates, savings account

Related Posts

Comments
18 Comments.
Comment #1 by Anonymous posted on
Anonymous
Does Wamu offer ACH transfer capability? Or would I have to initiate fromm outside? Thinking of opening an account but the hassle of having to deposit paper checks to make deposits to savings would be a deterrent. Direct deposit is an option but I like to control it if I ever wanna skip a deposit.

1
Comment #2 by Anonymous posted on
Anonymous
WaMu does allow accounts in both banks, but most WaMu managers deny this. The second bank is located in Utah and Idaho, and has better financial ratings than Washington Mutual Bank.

The number you need to call is 1 (800) 933-3528.

This is still an amateur hour operation. The CD's only say WaMu, rather than identifying "Washington Mutual Bank fsb" by name. Also, the "fsb" does not understand the account title problem for POD's.

1
Comment #3 by Anonymous posted on
Anonymous
I went to a branch in Houston. They told me the 5% CD offer has ended.

Has anyone got a 5% CD on Monday?

1
Comment #4 by Anonymous posted on
Anonymous
Does WaMu do a hard credit pull to open the high yield savings/checking account if you already have their 5%CD?

1
Comment #5 by altairn5 (anonymous) posted on
altairn5
they do have ACH transfer cap, but it is usually 4-5 days instead of the standard 3 business days

1
Comment #6 by Anonymous posted on
Anonymous
Even McCain mentioned Andrew Cuomo recently who sued WaMU.

WaMU is now under Alan Fishman so I would argue its probably somewhat better now, but I am not switching from HSBC or Countrywide right now.

1
Comment #7 by Anonymous posted on
Anonymous
I opened a Wama 5% CD a few weeks ago, and another today. Wamu's online application process and ACH transfer capability couldn't be easier. On my first CD, I received the small test deposits the day after applying online, and my account was funded a few days after that. I received several e-mails keeping me posted on the process. Wamu states that they only do a soft credit pull. I have no qualms about opening Wama accounts though I'm definitely staying under FDIC limits.

1
Comment #8 by Anonymous posted on
Anonymous
Wamu definitely does a check with Chexsystems for each online account. I got my credit report from Chexsystems because I was denied opening an account with Addision Avenue Credit Union and there was 4 references to Wamu. One for the first traditional account and then one for the online saving and two for each online CD. So if you don't want multiple inquires do only one or stay away from WAMU.

1
Comment #9 by Anonymous posted on
Anonymous
I opened a WaMu 5% CD a couple of weeks ago, and did another 5% one today. The only glitch was that the system was jammed up on the first one with a lot of activity. Today's went very smoothly. I assume the ACH will happen without problems.
Definitely stay under the FDIC guidelines.

1
Comment #10 by Anonymous posted on
Anonymous
How is this NOT a Ponzi scheme? It doesn't seem likely that they have the money to pay that rate, without dipping into other assets.

1
Comment #11 by Anonymous posted on
Anonymous
Re: Availability in branches
The 13mo/5%APY CD has and continues to be available in some branches. It's a manager's special, so it's up to the branch manager to decide whether to offer it or not. Unfortunately, this means that you have to call ahead to check. Some have posted in the older thread with branches where they have found it available.

Hopefully, it will be available everywhere starting Friday, when the new rate sheet goes out.

1
Comment #12 by CapitalClimate (anonymous) posted on
CapitalClimate
These special rate aren't likely to be available tomorrow. WaMu has been busted by the FDIC and gobbled up by JPMorgan Chase.

1
Comment #13 by altairn5 (anonymous) posted on
altairn5
wamu failed!!!

1
Comment #14 by virgquest (anonymous) posted on
virgquest
I have two 5% CDs at WaMu and actually just opened another one today, along with a 4% savings account and a free checking account. All three new accounts are now pending transfers from my other bank accounts. I guess I'll have to wait to see if they go through.

I've had a basic checking account with Chase for years, but I don't keep any of my savings there because their rates are terrible. I'm curious whether they will honor WaMu's recent rate promotions or shut those accounts down, lower rates, etc. If they do, it's back to other banks for me.

1
Comment #15 by Anonymous posted on
Anonymous
So from what I read, all deposits are safe including deposits that were over the FDIC limit. I guess from that perspective WaMu was too big to fail, so yay for the depositors. It's business as usual in their branches on Friday. I'm sure rates are going down soon though.

1
Comment #16 by Anonymous posted on
Anonymous
I agree with the above. It'll take months, minimum, for Chase to digest WaMu. I doubt that rates will change drastically up front, as plenty of dummies will now run the bank. Considering the relatively short term, I would hope that they'd keep the existing 5% CDs as well. A quick look at Chase's existing rates, however, makes the long-term look pretty bleak.

1
Comment #17 by Anonymous posted on
Anonymous
A check this morning shows rates unchanged... but now a link to a welcome from JP Morgan Chase....

1
Comment #18 by Anonymous posted on
Anonymous
These rates appear to still be in effect, more than a week later. With the raise in FDIC insurance, it's time to go whole-hog.

Why does Chase not lower rates? Do they need the deposits for some reason?

1