Dedicated to Deposits: Deals, Data, and Discussion

WaMu Brings Back the 5.00% 12-Month CD

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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 9/15/08: The 5% CD is still available at WaMu branches until Friday 9/19/08. Customers can choose terms from 13 to 17 months (see post).

Update 9/13/08: The 5% yield for 12 and 13-month terms have ended. The 12-month Online CD yield is now 4.00% APY. The yield for the 8-month Online CD remains at 4.25% APY.

Washington Mutual is once again offering a 5.00% APY 12-month CD. As before it's available as an Online CD with terms of either 12 or 13 months. I just called WaMu, and the CSR said that it's also available at WaMu branches for terms of 13 to 17 months. According to the CSR, it has no add-on feature and it requires no checking account. The CSR said it could end at any day, but readers have been told that it's scheduled to last a week just like the last one.

Several readers have reported being able to get IndyMac to match this 5% WaMu CD. So if you already have accounts at IndyMac, this could be an easier way to get a 5% CD.

For all the details about these CDs and a description of my experience opening this Online CD, please refer to this previous WaMu post. Here's a summary of how long it took to open the Online CD:
  • Sunday 8/24/08: Applied for the Online CD
  • Tuesday 8/26/08: Trial deposits/withdrawal made by WaMu. I verified the deposits at wamu.com
  • Thursday 8/28/08: Funding account debited. Deposit amount is shown at wamu.com
Several readers have reported problems in the process. One reader reported trying for 2 days to open the CD online, but a message kept appearing saying he needed to visit a branch to open the CD.

If you decide to open a WaMu Online CD, you might also consider their Online Savings Account. It currently pays 3.75% 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. When the CD matures, you can call and the WaMu CSR can close the CD and transfer the funds into the checking or savings account. A reader reported that in his case the transfer was done in an hour. WaMu used to have a service that allowed you to close CDs online, but readers have reported this feature is no longer available.

WaMu has been suffering from billions of dollars in loan-related losses in this mortgage crisis. As I recommend with any bank, it's best 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).

  Tags: CD rates

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Comments
44 Comments.
Comment #1 by Anonymous posted on
Anonymous
Does anyone have WaMu mailing address to mail in a check to fund the CD? I can't get my bank to transfer out money. Is this the correct address?

Washington Mutual
Attn: Online & Mobile Banking
P.O. Box 1165
Northridge, CA 91328-1165

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Comment #2 by Anonymous posted on
Anonymous
I called WAMU after getting an email stating that transfers to or from my non-WaMu account was unsuccessful. They told me that I need to start a new application. Not sure if I want to do that again after waiting for a week and was told repeatedly that the deposits were made already.

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Comment #3 by Anonymous posted on
Anonymous
If you want to add POD beneficiaries, you'll need their social security numbers.

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Comment #4 by Anonymous posted on
Anonymous
Same here, very frustrating and time wasting. I was told the 7-day limit to fund the CD is 7 business days, not 7 calendar days. The question is f I were to start a new application, would I have the option to mail in a check? I don't see such option available when I opened the CD last week.

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Comment #5 by Anonymous posted on
Anonymous
Another question, if I write a check to fund the CD, should it be payable to myself? Any help would be greatly appreciated.

If I can't make it to the deadline, what will happen to the check???

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Comment #6 by Anonymous posted on
Anonymous
On August 29, 2008 I opened a 13 month WaMu 5% CD. The banker told me to make the check out to myself and to endorse it on the back. I did both things and it cleared fine with the bank from which I withdrew the funds.
I went to the branch because 13 month CD could only be opened at the bank itself.

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Comment #7 by Anonymous posted on
Anonymous
I just opened a WAMU 5% CD at a branch. In NY they are offerring 13 months to 17 months, but they require a checking account. I put $1 in a new checking account to meet that requirement. My friend who tried to open an internet cd with WAMU two weeks ago still has not gotten the cd's funded correctly. I strongly suggest that you go into a physical branch. It's much easier and less prone to errors.

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Comment #8 by Anonymous posted on
Anonymous
I opened an online CD with no issues whatsoever. The online process was straightforward, WaMu made two small deposits, I confirmed those deposits, and my CD was funded. Couldn't have been easier.

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Comment #9 by Anonymous posted on
Anonymous
I just e-mailed to find out if you can open an IRA CD and an IRA money market account and whether they will do the paper work. I also asked if their were fees involved.

It is my understanding that IRA are insured up to$25000

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Comment #10 by Anonymous posted on
Anonymous
I noted the line in Banking Guy's write up about being told to come to a branch. This has happened to me, too, and I have had no success resolving the problem. I have several WaMu accounts, including different online CDs. I opened one the first time they were offering the 5% without a hitch. I tried to open another to use money in another account, got error messages several times, then finally the system came back and reported that I could not try again for seven days. I waited more like ten and then got a message telling me to come to a branch. I called the main customer service number, even speaking with risk operations and no one could help me. They just told me I was out of luck. When I saw yesterday that 5% CDs were coming back, I called the branch closest to me. They said they could tell me nothing, so I didn't waste my time going in person to try again.

By the way, writing to these folks is a total waste of time. They do not read what you write. Canned responses are the norm. And if you call or write to ask them about messages you receive, they are completely unhelpful. They try to help, but their knowledge is sorely lacking.

My thought on this company is that when all is well, the banking process is pretty good. But if there is the slightest hitch...well, you'll just be stuck!

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Comment #11 by Bozo (anonymous) posted on
Bozo
To: All
Re: WaMu

Well, depositing your money with WaMu (at least at a branch) is easy.

Getting it out, well, that's tougher (at least it was for me). We have a branch here in Lafayette (CA) (well, at least we used to). I had absolutely no success doing a custodian-to-custodian transfer over the phone, so I went to the branch here in Lafayette. After standing in line for 30 minutes or so, the person finally allowed me to speak with somebody in Northridge, CA (yup, where the earthquake happened). I did eventually get my money out, and transferred to Vanguard, but it was a stretch.

Bozo

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Comment #12 by ShraZZy (anonymous) posted on
ShraZZy
Always double check the info you entered for the CD as if you do it wrong you won't be able to open anything at WAMU for a week.

Here's a tip:
Anyone who opens a CD should just get the free online checking and put at least $1, so when the CD matures tell them to transfer it to your checking account and then you can transfer the funds to any of your external accounts. No need for checks that way or wait. Plus it's way easier to open CD as you can use your wamu checking or confirmed external account to fund the CD.

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Comment #13 by Anonymous posted on
Anonymous
just to double check.

I have a joint account with my wife in both wamu saving and wamu cd.

is that means we get 200k FDIC insured?
thanks.

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Comment #14 by Anonymous posted on
Anonymous
If you are considering purchasing a CD from WaMU you may want to do it sooner rather than later. According to the Wall Street Journal, the WaMu board has fired the CEO and hired a new one and it will be announced on Monday. Who knows what the new one will think of these higher rates!

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Comment #15 by Anonymous posted on
Anonymous
Killinger has been on the way out for a while. They just finally punched his ticket....

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Comment #16 by Anonymous posted on
Anonymous
If it seems too good to be true, it usually IS too good to be true.
Ain't that something yer Daddy taught you? I've had a WAMU acct. for roughly 8 years. I still use my checking acct. and keep roughly 10-11K in it--don't ask me why--it bears no interest.
Anyway, I git to go and "mix it up" with face-to-face CSR's as a real live branch in a real live city.
Trust me, I really, really would NOT "take the bait" on whatever their CD special might be. I've walked many a time into their branch and the young ladies who run the place as all pumped up about their company's latest scam. HA-HA!
I just smile and yawn and do my biz-ness and then move on in life.

If I were you, I would avoide this company like the proverbial plague. Check their stock price--they ain't in the tank for nuttin'!

And remember the old adage--if it seems too good to be true, it usually is.

I personally wouldn't eat a free hamburger from this company--let alone have them convince me to lock in real dollars. HA!

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Comment #17 by Mocirne (anonymous) posted on
Mocirne
Anonymous @ 7:20, what "bait" are you talking about? CD's are CD's, no matter what bank they are from, and are 100% insured by the FDIC, as long as you stay within the limits. And no offense, but I definitely wouldn't suggest taking any financial advice or warnings from someone who keeps their 10k in a 0% checking account, when the exact same bank offers a 3.75% savings account.

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Comment #18 by loquitur (anonymous) posted on
loquitur
FYI:

http://www.bloomberg.com/apps/news?pid=20601087&sid=ay1QxLRJQbWA&refer=home

and

http://online.wsj.com/article/SB122081162953607945.html?mod=hps_us_whats_news

amogst other headlines Monday to be
subordinated by the Fannie/Freddie news.

How is a potential/actual CD holder supposed to react?

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Comment #19 by Anonymous posted on
Anonymous
5% CD rate is for 13 months in-branch. Special is good thru September 12.

CDs greater than 12 months in-branch do not offer the option to add on nor the bump rate feature, those are only available on 12 months or less maturities and only on the in-branch openings. Online CDs do not have those features eventhough they are for 12 months.

Lots of "noise" at WaMu and other banks. The deal's NOT too good to be true, just stay under the FDIC limits. If you have more than $100k, look at the options on the FDIC website.

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Comment #20 by Mocirne (anonymous) posted on
Mocirne
Loquitur, sure the bank is going through some serious financial difficulties, but that doesn't matter. The CD (at least <= $100,000) is insured by the FDIC. The worst thing that could happen is you buy into the CD, the bank folds and the FDIC takes control over your account.

You then (and this is what most people don't understand) get the choice to leave your money in a 5% CD, or if the rate will be lowered, withdraw the money penalty-free (still retaining all 5% interest thus far accumulated) and place it somewhere else. So where is the loss or risk inherent in such a situation? Why not enjoy a 5% CD in this rate environment, albeit for a shorter time than anticipated?

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Comment #21 by Anonymous posted on
Anonymous
to Anonymous, at 7:20 - you are the reason i hate the internet. You know nothing about what you speak. what bait? what scam?? you obviously have no idea what a CD is, im not sure you know what a bank is.

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Comment #22 by Anonymous posted on
Anonymous
From market watch:
"WaMu also announced that it has entered into a Memorandum of Understanding (MOU) with the Office of Thrift Supervision (OTS) concerning aspects of the bank's operations, principally in several areas of its risk management and compliance functions, including its Bank Secrecy Act compliance program. In addition, WaMu has committed to provide the OTS an updated, multi-year business plan and forecast for its earnings, asset quality, capital and business segment performance. The business plan will not require the company to raise capital, increase liquidity or make changes to the products and services it provides to customers."

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Comment #23 by Anonymous posted on
Anonymous
I opened my cd account on 08/26 & confirmed deposit made on my external account But have not been able to fund the cd I Called the customer service & told them the error code 1332.So far they have not called me with any resolution. I guess I will give up & move on with other bank

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Comment #24 by Bozo (anonymous) posted on
Bozo
To: All
Re: Retirement Savings

I know WaMu's IRAs are insured by the FDIC, but when WaMu goes under, do you really want to deal with the government? I finally decided to keep my retirement money in a safe place. It's not earning as much, but I trust it will be there when I need it.

Sort of my Mother's Depression-era mentality.

Bozo

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Comment #25 by Anonymous posted on
Anonymous
To: Bozo
Re: Still Scared

Your money is 100% safe, yet you are scared. At this point, why not just put it under your mattress? This would fit in with your pre-FDIC, depression-era, fear of fear itself mentality.

It's an IRA. If you stay under the 250k limit, there will be no delay in getting your funds. It will be there when you need it. And just because you irrationally fear that it won't be, doesn't mean that you need to spread that here to everyone else. We're tired of this nonsense talk; take it elsewhere.

To: Everyone Else
Re: Thinking Logically
Stay under the limits, where ever you put your money. There's nothing to fear after that, but losing your great rate.

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Comment #26 by stock picks (anonymous) posted on
stock picks
I just opened a 13 month cd with 3 P.0.D's for 5%. I am not worried, if they go under my principal is safe
and if they stay open,I feel I got a
a good rate to park my cash.

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Comment #27 by Mocirne (anonymous) posted on
Mocirne
Perfectly stated, Anonymous @ 2:45. The amount of insured money that anyone has ever lost since the FDIC's inception 70 years ago has been equal to exactly zero. And "dealing with the government" means probably waiting 1, possibly waiting 2 days for the FDIC to mail you a check for the full amount, plus interest.

Stock picks, just to let you know, as long as you keep your money below the insured limits, not only is your principal insured, but every cent of your accrued interest up until that point is insured also.

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Comment #28 by Anonymous posted on
Anonymous
WaMU website doesn't say what the early withdrawal penalty will be. Does anyone know?

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Comment #29 by Banking Guy (anonymous) posted on
Banking Guy
For terms of 12 months and longer, the early withdrawal penalty is 180 days of interest on the amount withdrawn. I have more of these CD details and a link to the disclosure in my previous WaMu post.

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Comment #30 by Anonymous posted on
Anonymous
I just thought I would add that you need to be over 18 years old to open the online CD. in other words, there is no possible way to open a custodial account for minors using WaMu's (braindead) system. I even tried the "two-person" account, but both still needed drivers license or state ID so the system came back with the "over 18" notice.

I have opened accounts at Pentagon Federal and Patelco in the past for my nieces and nephew without ever having any problems, but WaMu can't seem to figure it out. not sure about in-branch yet for the 13-17 mo. deal, but a live person might be able to figure it out. however, my experiences with WaMu make me think it still might be a long-shot.

that's the pertinent bits of this post. otherwise, after 10 minutes trying to get a CSR by phone using the "help" number provided, I did manage to reach an unqualified and unhelpful individual. then I spent another 10 minutes on hold before I hung up.

the in-branch staff has always been friendly and helpful, but WaMu has no interest in real customer service evidenced by their circular phone tree. the business pundits have been talking about a major financial institution failing and I was pretty sure it was going to be Wachovia, but if I was a betting man I would now put my money on WaMu. my guess is that they will fail and be sold off shortly.

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Comment #31 by wco81 (anonymous) posted on
wco81
So is it easy to set up POD accounts for the WaMu online CDs?

I set up one online CD a couple of days ago but I don't recall a place to enter POD info.

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Comment #32 by Anonymous posted on
Anonymous
I have been waiting for a week and still can't receive any useful information. Hope someone here has answers for me.

Is it possible to open this CD online transferring money out of my Navy FCU's checking account (without first registering @ Navy FCU)? Is there any amount limit per ACH?

Wamu won't accept a check and no, there is no branch within 250 miles.

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Comment #33 by Banking Guy (anonymous) posted on
Banking Guy
Yes, it should be possible to open a WaMu CD online funded from your Navy checking account. I believe only the Navy FCU's savings account restricts ACH debits. I don't think the checking has any restrictions on the amount of the ACH. I recommend calling Navy FCU to confirm.

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Comment #34 by virgquest (anonymous) posted on
virgquest
I just opened my second 5% online CD. The first one was funded without a hitch. The application for the second went smoothly and I'm hoping funding for that one (from the same external account) will go equally well.

To follow up on the comments people have made about long phone hold times and poor customer service, I called with a question this morning and got a rep after a very brief hold - maybe a minute. She needed to transfer me, but the second rep also picked up almost immediately. Both CSRs were efficient, but polite. My questions were answered and I got off the phone. I can't say they were the most personable CSRs I've even spoken to, but they did their jobs and I have no complaints. Also, they were both American, so WaMu doesn't seem to have outsourced their call centers to a foreign country.

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Comment #35 by Anonymous posted on
Anonymous
Banking guy, thanks for the info. will wait and see. I'm getting conflicting answers from wamu, one rep said, the only way to fund the cd is by ACH, nothing else. Now, another rep said, there are many ways to fund the online cd. I was instructed to send the check to Texas location. Anyway, I'm waiting to see if wamu can get money out of my Navy FCU checking account.

Navy FCU is not much better, I was told to set up an external transfer account bah bah bah while I explicitly asked if it is possible to transfer money out of my checking via ACH initiated by another bank, not by me.

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Comment #36 by Anonymous posted on
Anonymous
I've only recently (2 years) gotten into this on line CD stuff. Since all my cash (85K) is in the 5% WaMu CD I'm still nervous about the hassle...

-----------------------
WaMu, likewise, has seen its market value wither, as it battles rising mortgage delinquencies and defaults. Its shares have fallen more than 90% since early July of last year, right before the rapid erosion in the credit markets began.

With losses in its mortgage portfolio expected to peak at $19 billion, the Seattle-based bank could be Wall Street's next casualty, some analysts believe.

"The question becomes can it survive if it has billions and billions of dollars left to write down on those loans?" Ladenburg Thalmann analyst Richard Bove said. "What's going to keep it in business, what is going to keep it alive?"

One thing working in WaMu's favor is its valuable deposit base. Bove suspects management is "scrambling to find a buyer."

One indicator that the bank could be in trouble is the widening of its credit spreads, evidence that investors believe the debt is riskier.

Washington Mutual's spreads are greatly wider than Lehman's -- and Lehman's spreads are already wider than those of Bear Stearns Cos. shortly before its demise in March, according to Len Blum, managing director at investment bank Westwood Capital.

WaMu does not typically comment on share price, market speculation or ratings agency actions, said spokeswoman Olivia Riley. She also said the bank does not generally make comments about things such as credit spreads mid-quarter.

WaMu took a number of hits this week, starting with the removal of its chief executive, Kerry Killinger, on Monday. He was replaced by Alan H. Fishman, the former president and chief operating officer of Sovereign Bank.

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Comment #37 by Anonymous posted on
Anonymous
Er, what hassle? Having gone through IndyMac, the only problems were for those who didn't heed the FDIC limits or had an irrational fear of 100% security of their money....

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Comment #38 by Anonymous posted on
Anonymous
Very easy online CD account opening. I am funding my CD by ACH transfer, and received the two small test deposits in my other-than-WaMu checking account the day after opening the online CD. I verified the deposits and immediately received an e-mail saying my CD would be funded within 3 business days. WaMu appears to have a very good online banking system, with as large as they are. I never had a WaMu account before and will definitely stay under FDIC limits.

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Comment #39 by Anonymous posted on
Anonymous
For wco81 who asked: So is it easy to set up POD accounts for the WaMu online CDs?

You have to go into a local branch to do so, and the funding for your account must have already been completed and not pending. You must provide the beneficiary's name, date of birth and SSN. They will print out a couple of forms for you to sign which contain all the info that you supplied, which they will then forward on to their main office. I also asked for my own copy to keep with my personal records. I believe you can also request the paperwork by mail to set up a beneficiary if you can make it thru their phone voicemail maze to a live person, but if a branch is close by, it is much easier to go that route instead.

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Comment #40 by Jeff D. (anonymous) posted on
Jeff D.
All you morons opening up an account at WAMU for a measley 5% interest are going to get to experience first hand what it's like to deal with the FDIC just like the Indymac "customers" got to do a few months back.

All you had to do was just put some money in a brokerage account and buy puts on this thing a few months ago when the BK rumors first started to swirl around and you could have made between 500 and 5000% gain as the stock collapsed and the put premiums exploded higher in value......

And you people risk money for 5%

GEEZ!!!!

WM is COOKED!

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Comment #41 by Safe and Sane (anonymous) posted on
Safe and Sane
Dear jeff d.:

You know who is really a moron here? I'll give you one guess. (Hint: Look in the mirror.)

Thanks,
Enjoying my FDIC insured 5%

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Comment #42 by Anonymous posted on
Anonymous
There have been news reports that seem to indicate that JPMorgan Chase is in advanced talks with Wamu for a possible takeover.

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Comment #43 by Anonymous posted on
Anonymous
I opened a 5% CD with WAMU during their 5% promotion. They did the small deposits, I verified them, and they never drafted my account after that. I emailed them on Saturday and they responded that since I did not fund the account within 7 days that the interest rate was no longer in effect. I thought that they would draft my account to fund the CD. Not true I guess. I believe the best way to buy a CD at WAMU is to walk into a branch and do so. Other wise why waste your time. We are existing WAMU customers so it should have not to have been such a hassle.

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Comment #44 by Anonymous posted on
Anonymous
The rates were dropped to 3% for 8/12/13/18 months CDs today, Monday 6, 2008.

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