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Update on WaMu's 5% 12-Month CDs

POSTED ON BY

Chase Manhattan Bank
WaMu continues to offer 5.00% APY on 12 and 13-month terms for its Online CDs. A reader also mentioned that his branch in Texas was still offering 5% APY on terms from 13 to 17 months as of yesterday.

WaMu also continues to offer 4% APY on its Online Savings Account when it's linked to the WaMu checking account. Unlike the CD, there's no lock on this rate after the account is opened. I would think it's likely that the rate will fall in a manner similar to the fall of Countrywide's Savingslink rate after Countrywide's acquisition by Bank of America.

As mentioned in this JPMorgan Chase Welcome Page, "all WaMu customer deposits are now deposits of JPMorgan Chase, one of the strongest financial institutions in the world." So this is one of the rare opportunities to take advantage of a very competitive CD at a financially strong institution.

For those who already had WaMu CDs before the closure, the FDIC's Q&A Guide now states:
JPMorgan Chase accepted Washington Mutual's interest bearing accounts including CD's at the contract rate; therefore, they are not waiving early withdrawal penalties.

The good news is that you'll continue to receive the original interest through maturity. The bad news is that there will not be any waiving of early withdrawal penalties.

For details of WaMu's Online CDs and a description of my experience opening one in August, please refer to my WaMu Online CD review. If you open the WaMu Online CD, make sure you provide all the details about the funding account. A reader commented that he had mistakenly labeled his funding account a "checking account" rather than a "savings account" in WaMu's online application. Due to this, WaMu wasn't able to complete the funding. The WaMu website wrongly stated that the external account was closed. After 30 minutes with WaMu reps, they figured out the problem was the account type.

Update: Another reader reported problems with WaMu's online application. The application rejected him because his identity could not be verified. He was able to open the 5% CD over the phone, but the 12-month term wasn't available. Only the 5% 13-month CD was available over the phone.
  Tags: CD rates, Chase Manhattan Bank

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Comments
23 comments.
Comment #1 by Anonymous posted on
Anonymous
Ken,

Since you're getting "paid" by FNBO now, will you give us a detailed list of the changes they're making to our accounts? It looks like transfer are going to happen faster and there's going to be a dormant account fee.

Why don't they just come out and say what the differences are?

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Comment #2 by Anonymous posted on
Anonymous
I heard from wamu rep that in NJ too, they are offering 5 apy for 13-15 month terms at the branch. Which one is better to lock? 12months on line or 13-15 at branch?

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Comment #3 by Anonymous posted on
Anonymous
on fnbo related post above, though not applicable for the wamu deal updated by bankguy - it seems that if the account is used exclusively for transfers or dormant, they may levy charge. They are not clear on charges, I agree with the above post.

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Comment #4 by Anonymous posted on
Anonymous
Because FNBO is a bad, consumer unfriendly, bank.

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Comment #5 by Anonymous posted on
Anonymous
I got the e-mail last night, phoned the 24x7 customer service and closed my account.

This is what banks understand.

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Comment #6 by Anonymous posted on
Anonymous
Like the original post mentioned, should be very careful of your account type.
First time, I choose save account for my countrywide savingslink account. But my new account dosen't open at all. I called Wamu, the representive checked the status, said the bank informatoin is wrong.
I just called countrywide , the agent said I should choose checking account. I will try tonight.

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Comment #7 by Anonymous posted on
Anonymous
I was surprised to see that the FDIC posted a notice in the Seattle times stating that, per 12 U.S.C. Section 1822(e), Wamu depositors have 18 months to claim their new account in the new institution, otherwise it reverts back to the FDIC, and then escheats to your state. You'd think they'd at least put this on their website too if they bothered to put a notice in a newspaper.

In short, can claim by 1) making a deposit/withdrawl, 2) executing a new signature card, 3) providing new bank with a change of address for, or 4) writing new bank to say you wish to keep your accounts active.

Claiming one account claims all, so may only affect those with 2+ year CDs and no other accounts.

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Comment #8 by Anonymous posted on
Anonymous
After reading your post regarding Wamu's 5% APY on a 12 month CD (10/1/08), I immediately applied online.
This is still available though you must authorize an ACH funding link at the end of the online application.
This can be somewhat confusing since it explicitly states you have "30 days" to fund your account.
Called to confirm and was told there is no option to fund by check.
However, you do have the option to delay verifying the ACH test deposits Wamu makes into the funding account.
This way you won't have the funding deposit immediately debited from the account you had to choose on the application.
Apparently Wamu will guaranty the locked in rate while waiting for funding as long as it's less than 30 days from initial application.

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Comment #9 by Doug (anonymous) posted on
Doug
Yes, I am doing just that---grabbing the rate, but delaying the microdeposit verification process until I wire in the funds to my ACH acct next week. Although you have 30 days to fund the CD acct, the rate is only guaranteed for 7 days from the date you apply.

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Comment #10 by Anonymous posted on
Anonymous
My family including myself opened this CD before WaMu was taking over by JP Morgan without success. Wamu was successfully making micro deposits and withdrawal but it never actually took the money out to fund the CD. I have no idea why this happened. Do we need to setup a link from the source account(funding institution)? Can someone educate me? If I have money in bank A, and I open an acct in bank B. Can I just tell bank B to ACH transfer money from Bank A? Do I need to do something on Bank A side like tell Bank A about bank B?

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Comment #11 by ShraZZy (anonymous) posted on
ShraZZy
did you confirm the two deposits on the wamu cd account? It then automatically transfer the amount you setup. You can check in the scheduled/history transfers. It will take couple days to see the CD w/ available balance.

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Comment #12 by Anonymous posted on
Anonymous
I'd no problem with wamu in microdeposits with checking/saving account checkmark. I have money market account and put as savings account. It went thru' in 1 day.

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Comment #13 by Anonymous posted on
Anonymous
Yes, we verified the deposits and thought everything was setup until we heard the take over news. We then checked our bank accounts and no money was taken out to fund the new CDs. Weird!

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Comment #14 by Doug (anonymous) posted on
Doug
Anonymous,

After the microdeposits appear, you must go to the WaMu website, log in, click on the "verify funding" link, and enter the amounts of the two microdeposits. WaMu should then automatically ACH your full deposit, a day or two later.

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Comment #15 by LJ (anonymous) posted on
LJ
I called a NJ branch. The 5% rate is available for 13 to 17 month cd's & they were notified that the rate will end today, Friday 10/03/08.

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Comment #16 by Anonymous posted on
Anonymous
Doug, we already did the verifying thing. We never received any email
or phone call to let us know what happened.

I think I am going to open a new CD to give it another try.

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Comment #17 by Anonymous posted on
Anonymous
I opened a WaMu Online Savings acct. last week, and started the process of creating a linked external account this past Monday. On Wednesday night, I verified the trial deposits and then initiated an ACH transfer of $11K from my linked external account to my WaMu acct. -- but the WaMu Web site indicated that this transfer will not take place until next Monday, five days later. A phone call to their Customer Service dept. informed me that ACH transfers generally take 2 to 3 business days.

Before initiating the ACH transfer, I moved the transfer amount from an interest-earning savings acct. into the linked acct., a checking acct. that earns nothing. Even though it is only a few days, I hate the idea that my money is not earning interest while I wait for WaMu to process the transfer. I guess from now on, I will have to wait until the last minute to move money out of an interest-earning account, but it seems like it should not be necessary to go to such extremes to avoid losing interest. Besides, when email delivery is almost immediate, why would a bank delay ACH transfers for three days?

I just thought I'd ask Banking Guy and anyone else who might care to comment, is this delay of up to three days standard?

--Doughboy

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Comment #18 by Anonymous posted on
Anonymous
Unfortunately, the slow-as-molasses ACH is standard for WaMu. I strongly suggest pushing and pulling via other accounts which are faster.

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Comment #19 by Dan The Man (anonymous) posted on
Dan The Man
Doughboy, Why didnt you just fund your new Online Savings Acct with your external SAVINGS acct. I opened a CD on Sunday and had them take the initial funding from my savings, not my checking. That way I didnt loose any interest. I did the application online on Sunday, the trail deposits were in there Monday night, I verified them, My CD was opened on Wednesday. Pretty darn quick seeing the're not actually opened on Sunday

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Comment #20 by Anonymous posted on
Anonymous
RE: Dan The Man -

I did not fund the WaMu Online Savings acct. from my external (Wells Fargo) savings acct. because I wanted to avoid "excess activity fees." I just recently found out the hard way that my Wells F. savings account allows only about 6 transactions to be performed in any given statement cycle via ACH or phone -- even when I transfer funds between that acct. and my checking acct., which are both Wells Fargo accts. -- the same institution!

I had already linked my Wells F. savings acct. to my PayPal acct., and without being aware of the aforementioned limits, I'd funded several online purchases with PayPal payments from that savings acct. and was therefore hit with this ****ed "excess activity" fee. Before you advise me to dump Wells Fargo, however, be aware that this same limitation is mandated by the government for most savings accounts at any institution.

The weird thing is that Wells Fargo will allow me to make an unlimited amount of transfers between my accounts if I perform those transactions at ATMs, but not if I perform the same transactions using their Web site from my home computer. That makes no sense at all, but those are the rules.

-Doughboy

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Comment #21 by Anonymous posted on
Anonymous
I believe all savings accounts have a limit of 6 withdrawals per month, not 6 transactions. For WaMu CD, you can fund the CD directly from your Wells cargo Savings or Checking.
Of course, there's nothing wrong with the way you setup. Cheers!

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Comment #22 by Anonymous posted on
Anonymous
Does anyone know an easy way to withdraw the money from WaMu when the CD matures?

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Comment #23 by LJ (anonymous) posted on
LJ
WaMu online cd rates have changed 8,12,13 & 18 month rates are now 3%.

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