As featured in The Wall Street Journal, Money Magazine, and more!

Washington Mutual (Chase) Drops Interest Rate as Expected

This article was written by in Banking. 9 comments.

February 5, 2009 update: The following information has expired. Washington Mutual no longer offers these rates.

Less than a month ago, Washington Mutual increased the interest rate offered on the bank’s savings account to 4.0% APY. This came as the bank was trying to attract capital. Since then, WaMu was in danger of failing and was acquired by JPMorgan Chase.

On September 26, I wrote:

There is no need to panic or pull money out of these accounts unless you don’t want to become a customer of Chase. It is possible, however, that Chase will lower Washington Mutual’s attractive interest rate offering of 4.0% APY, but nothing has been announced about this particular matter.

As of today, the interest rate drop is official. As I discovered, thanks to Five Cent Nickel, the new interest rate yields only 3.0%.

With central banks around the world dropping their short-term lending rates, I expect more banks to follow. With 3.0% APY, WaMu/Chase may still be on top of the list, but for now, their interest rate is only average among other high-yield savings accounts (list to be updated shortly).

I suggest not moving money from one bank to another to “chase” high rates until it’s clear how the other banks will react to the drop of the target for the federal funds rate to 1.5%.

Updated February 5, 2009 and originally published October 8, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

Email Email Print Print
About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 9 comments… read them below or add one }

avatar purpelnoon

I had a 5% Yield on a CD I had with WAMU, right before the whole debacle. It looks like my “reward” for taking the extra risk will be a lowered interest rate too. You just cant win!

Reply to this comment

avatar TheMightyQuinn

I noticed that too on Monday, when I deposited a large check in my savings hoping to reap that 4%. I wonder how long until it’s 2%? If that happens I’ll just move it to ING.

As for CDs, it’s my understanding if they change the terms of your CD you’ll have the option to withdraw without penalty, is this correct? I have a number of these 4-5% CDs with WaMu, but if they change the rates I’ll probably just pull them out.

Reply to this comment

avatar marcus

I purchased CD’s last Spring at my Credit Union at a set term and interest rate. The following week the rate was halved, yet I had ‘locked’ into the higher rate per the terms of the CD Agreement.

Not the first time this has happened, and I have been in a reversed situation before as well.

Reply to this comment

avatar Kevin

Newsflash: It’s now at 2.5%… how low will it go?

Reply to this comment

avatar Mike

1.5% and dropping …

Reply to this comment

avatar phil

i got the wamu online savings account when it was at 3.5%. now it’s dropped to 1.5%.

Reply to this comment

avatar purpelnoon

I looked at my CD recently that was paying 5% and it looks like it still is. The 5% rate is still listed.

Reply to this comment

avatar Marisa

My WaMu online savings rate just dropped to .01%! And I can’t even find out what their other current rates are. I may just switch banks all together.

Reply to this comment

avatar TheMightyQuinn

You’re not alone Marisa. I can’t believe my once proud 4% interest is now at 0.01%.

Be careful if you try to transfer your money to another bank (like ING), since Chase appears to charge $3 to transfer money to another bank.

Reply to this comment

Leave a Comment

Note: Use your name or a unique handle, not the name of a website or business. No deep links or business URLs are allowed. Spam, including promotional linking to a company website, will be deleted. By submitting your comment you are agreeing to these terms and conditions.

Notify me of followup comments via e-mail. You can also subscribe without commenting.