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 @flexo on Twitter and visit our Facebook page for more updates.
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{ 9 comments… read them below or add one }
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!
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.
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.
Newsflash: It’s now at 2.5%… how low will it go?
1.5% and dropping …
i got the wamu online savings account when it was at 3.5%. now it’s dropped to 1.5%.
I looked at my CD recently that was paying 5% and it looks like it still is. The 5% rate is still listed.
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.
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.