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Details of Wells Fargo's New Way2Save Program - Big Changes from Wachovia's Way2Save

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Wells Fargo announced on its blog the new Way2Save program which is now available in Minnesota and Washington State. Unfortunately, the rates and bonuses have fallen. If you already have a Wachovia Way2Save program, here's how Wells Fargo's blog describes how your account will change:
NOTHING will change with your current Way2Save account until the Wachovia branches in your state convert to the Wells Fargo brand. Also, when your home state does convert, your Way2Save account and all automatic transfers you've setup will convert to the new Wells Fargo Way2Save. Plus, you'll automatically be enrolled and eligible to receive the first-year premium interest rate and savings bonus on one Way2Save account.

Two important points that I get from the above include:
  • The rates and bonus terms will change to the new Way2Save account when your state converts
  • If you have multiple Way2Save accounts, you'll only get premium interest and bonuses on one of those after your state converts
Here's a recap of the current Wachovia Way2Save program:
  • 5.00% APY in the Way2Save account during the first year
  • At the end of the first year, there's a 5% bonus on the balance (up to $300)
  • Only two ways to get money into the current Way2Save account: $100 maximum monthly automatic transfers from checking to Way2Save or $1 transfers from checking to Way2Save after certain electronic transactions
  • Electronic transfers that qualify for initiating the $1 transfer include debit card purchases, ACH debits and paperless online bill payments
The perks go down after the first year. Refer to the Wachovia Way2Save webpage for the full details. I also have more details in my old Way2Save review.

The important features of the new Wells Fargo Way2Save include:
  • 3.00% APY the first 13 months on balances of up to $500
  • At the end of the first 13 months, there's a 3% bonus on the balance (up to $150). The amount of the bonus will be 3% of the lesser of: A) the total dollar amount of Automatic Transfers and Save As You Go transfers, up to a maximum of $385 transferred per month, made during the first 13 months from the account opening or B) the Way2Save account balance at the time the bonus is credited
  • No limit on the automatic monthly transfers. However, there's little incentive to go above $385 per month
  • Save As You Go transfers are $1 transfers from the checking to Way2Save after a debit card purchase, online bill pay or automatic payment (ACH debit).
  • You are allowed one Way2Save account that is eligible to receive a premium rate and bonus. Wells Fargo will use your taxpayer ID number to determine your eligibility for the one-time premium interest rate and one-time bonus. Additional Way2Save accounts will receive our standard interest rate and no bonus.
After the first year, there's no longer any premium interest or bonus. The non-premium interest rate is negligible (0.05% or less). Consequently, after the first year, you'll be better off moving the money into a high-yield savings account.

For more details of the new Wells Fargo Way2Save program, refer to this Wells Fargo savings account page, select Minnesota or Washington State, and select the Wells Fargo Way2Save link.

Comparing the Old and New Way2Save Accounts:

For those who have 5 Way2Save accounts per family member, I'm afraid the easy money will soon be over since the new Way2Save will limit the bonus to one per family member. Also, for those who have been able to initiate enough ACH debits to qualify for the $300 maximum year-end bonus, the new program will be a disappointment.

For those who just have one Way2Save account per family member and have just done the $100 per month transfer, the new program will be a little better if you can increase your automatic transfers to $385. Here's how I determined this:

First, if you compare the current Way2Save program with a high-yield savings account that pays 2% APY, you can easily earn about $80 more in the first year in the Wachovia Way2Save program. This comes from a 5% bonus on $1,200 (12 $100 monthly transfers) and total interest of 12 monthly $100 deposits which equals about $33. The interest if the account paid only 2% would be about $13. Thus, the total advantage of the old Way2Save account over a high yield savings account is about $80.

Now if you compare the new Wells Fargo Way2Save program with a high-yield savings account that pays 2% APY, you can easily earn about $96 more in the first 13 months in the Wells Fargo Way2Save program. This comes from a 3% bonus on $5,000 (13 $385 monthly transfers) and about $5 additional interest from the first $500 of the balance (difference between 3% vs 2% of $500). As you can see, you don't gain much by the premium interest since it's capped to the first $500. The vast majority of the benefit comes from the 3% bonus at the end of the first 13 months.

Unlike the old Wachovia Way2Save program, you're free to make as many deposits as you want into the new Wells Fargo Way2Save program. However, after you max out the premium interest and the bonus, there's little reason to transfer money into the Way2Save account. You'll earn a lot more if you transfer the money into a high-yield savings account at another institution like Ally Bank or Alliant Credit Union.

Another thing to watch out for with the new Wells Fargo Way2Save is a $5/month fee. This can be waived with a $300 balance or automatic recurring transfers.

I haven't read through all the small print of the new Wells Fargo Way2Save program, so I might have missed some important details. Please leave a comment if you find something that I've missed.

Thanks to the reader who emailed me the link to that Wells Fargo blog post.

Wachovia's Free Checking Refer-a-Friend Bonus:

Wachovia still has its checking account refer-a-friend bonus in which both you and the friend can earn a $25 gift card. If you need a referral, email me at bankdeals at gmail dot com. [Update 10/12/09: The online referral system is no longer available.] This bonus is scheduled to last until the end of 2009.

Related Pages: Wells Fargo Bank, Wachovia Bank, savings account

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Comments
18 Comments.
Comment #1 by Anonymous posted on
Anonymous
Not too late to sign up for the old plan in the affected states. I just did. I gave it $1,200 plus some change and will use the auto transfers. I consider this to be a $1,200 CD at about 7.7 APY. Not bad.

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Comment #2 by Anonymous posted on
Anonymous
so when will Wells Fargo take over the unaffected states?

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Comment #3 by Patty (anonymous) posted on
Patty
How can you give it $1200 to start? You couldn't when I opened my w2s, only could give a maximum of $100/month thru auto transfers, in addition to the $1 for the various debits, bill pays, etc?

Anyway, I am in my second year. If Wells converts my state , say 8 months into the year, will I get the bonus for this year, or for the 8 month period, or not at all?

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Comment #4 by Anonymous posted on
Anonymous
This is a little bit off topic but I wonder how the free checking is going to work once Wells Fargo takes over. I ask the Wachovia teller but she said they had heard nothing. Last time I checked, Wells Fargo has free checking for students only. Over the years, I notice that Wells Fargo has low cd rates & lot of fees. If Wells Fargo comes in and tries to add their fees to our free checking, I see them losing lots of accounts. I hope they read this blog! Can anyone advise on the free checking where Wells Fargo has taken over?

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Comment #5 by Anonymous posted on
Anonymous
Answer for above - I funded the Wachovia checking account with $1,200 and setup an auto transfer for $100 per month into my Way-to-Save account. That's it. The Way-to-Save gives an APY of 5% on the incoming transfers, and after the first year, an additional 5% is added. If you do the math, it comes out to about $92 in interest. That's an effective APY of about 7.7%.

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Comment #6 by Anonymous posted on
Anonymous
I was told by a bank manager they were switching things in California sometime in March.

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Comment #7 by Anonymous posted on
Anonymous
I think your math is wrong. You say you can make $96 more in the new Wells Fargo Way2Save than in a 2% APY account.

I don't get it. All the money over $500 only earns 0.05%, so you're losing out on earning 2% on all the money in the account beyond the first $500. That certainly reduces the value of the ultimate $150 bonus you get after 13 months (3% of $5000).

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Comment #8 by Banking Guy (anonymous) posted on
Banking Guy
Earning 2% APY for 13 months on 13 $385 monthly deposits only generates about $59 of interest. Remember that you don't earn much until the deposits start to add up in the later half of the 13 months. The $150 bonus give you $91 above this. The 3% on the $500 only adds about $5. That's how I got an advantage of $96 over a 2% high yield savings account.

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Comment #9 by Mike H. (anonymous) posted on
Mike H.
It amounts to peanuts. It is so sad that this is one of the options we are forced to consider.

Thanks again for all your hard work, Banking Guy. You have helped me make hundreds, if not thousands of dollars over the years that I have been reading this incredible blog. I will keep reading every day and keep hoping that things turn around.

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Comment #10 by gaelicwench (anonymous) posted on
gaelicwench
Mike H said: It amounts to peanuts. It is so sad that this is one of the options we are forced to consider.

And that is it in a nutshell - pun intended. But we don't have to be forced to do anything. We do have choices to do what we want with our money. It's this very reason in this post by Banking Guy that gives me the option to simply pull out, rather than continuing to "feed" the opportunistic crocodiles. It's why I simply no longer care for the big banks. They're extremely manipulative, coming up with all manner of shenanigans in order to hook us in; hence, making us [freely] decide to deposit our money into their accounts.

I still read all of Banking Guy's blogs regarding offers from a multitude of banks and credit unions, for the simple reason that they're very informative. This allows me to see for myself if I am about to be taken in by a means of being "scammed" or will genuinely be earning a little money.

Thanks for all this, Banking Guy.

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Comment #11 by Anonymous posted on
Anonymous
Wells Fargo still offers free checking to non-students, but it may depend on what state you're in. Why don't you just check their website to find out?

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Comment #12 by Anonymous posted on
Anonymous
Basically a 13 month installment savings -- 5K / 3% (or 1K / 4%). If converted accounts are subject to the new ("lesser of") terms, then all the money should be withdrawn.

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Comment #13 by Anonymous posted on
Anonymous
As a Wachovia customer, I'm just learning about Wells Fargo. I was astonished to find out today that Wells Fargo offers no ACH capability. They'll accept incoming ACH deposits initiated by other institutions, but nothing else. They claim to be worried about fraud, which is understandable, but need to come into the 21st century. This will cause me a lot of problems since I've relied on ACH at Wachovia. Maybe Wells Fargo will act if lots of bankdeals readers call them.

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Comment #14 by Anonymous posted on
Anonymous
what about the people who actually decided to leave the money in the w2s for the 2nd yr (2% + 2% bonus on transfers) according to the old program? If you look at the w2s webpage now, all it mentions is the 1st yr and then says "variable rate?" Even the current program seems to just encourage people to keep the account open for only a year instead of the 3 years it used to encourage.

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Comment #15 by Anonymous posted on
Anonymous
Now that Wachovia in California will be converted in April, what are you guys going to do with Way2Save?

I have made some calculation and I will close the account as soon as WellsFargo take charge because new rule sucks!

Only 3% on $500 deposit? Only first years bonus after 13month and it's 3% again?

I think I am better off with Reward Checking Accounts and gas pumps every time I use my car.

2
Comment #17 by Mr Duke (anonymous) posted on
Mr Duke
I am glad for coming across this site because over the past 3 months I have been misinformed on the details of the way2save account. Let's start with the beginning.

First, the banker who told me about the account told me it was 3% a month, not annualy. I laughed and said yeah right, that's too good to be true. He confirmed I would be getting 15$ a month, so I signed up. After one month of not getting a 3% return, I found out that I had to have a balance of 505$. So, 40 days later and only receiving 2-3$ total interest I called WF and ask about what is going on.

After being on hold for 10 minutes the person said they were looking into it. Then I was hung up on.

Next customer rep was more helpful, but DID NOT TELL ME the 3% was after 13 months. There are so many misinformed people at WF I am considering moving to a new bank. The banker explain how I was getting such a great deal with my 1$ a month and that I should try a CD if I wanted more.

Grrr.

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Comment #20 by Anonymous posted on
Anonymous
Can i receive domestic wire transfer into my ways2save account?

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Comment #21 by Anonymous posted on
Anonymous
No bonus. 0.01% (one basis point) APR. $5/month fee. (waivable with $300 minimum deposit or use of a different savings option)  A good product under Wachovia; a waste of time under Wells Fargo.

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