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WaMu CD Rate Update: 5.00% APY, 12-Month CD

Update: The 5.0% APY Online CD is no longer available and the rates quoted in this article are out of date – read this list of best CD rates [3] for current rates.

A month or so ago, Washington Mutual [4] (WaMu) offered a 5.00% APY 12-month CD, one of the best interest rates on a 12-month CD available (I wrote a post listing the best CD rates [3] available, updated weekly). ING Direct’s [5] 12-month CD is 4.00% APY [6] and HSBC Direct’s [7] 12-month CD is 3.70% APY [8], WaMu is offering a rate that’s a full point higher for the same term. (If you check Bankrate’s list of CDs, the national overnight average is 3.69% APY, WaMu’s CD isn’t even listed)

Right now I have some CDs at ING Direct because I laddered our emergency fund [9], but the rates are all in the 3%’s only recently have they gone up. The rates these days are far more competitive and I’ll be opening a WaMu [10] account so I can take advantage of the one-two punch of a high yield checking/savings account combo and this 5.00% APY CD.

While I’m pretty sure you don’t need a checking/savings account to open a CD, I think it’d be easier to use their 3.75% APY checking account as a holding account. It certainly trumps my piddly 0.00% APY checking account for sure. Plus, having a checking account there costs nothing (except time) and it makes it easier for me to move things around if WaMu keeps things competitive.

Details of the offer:

(Photo: thetruthabout [12])