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.