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WaMu Online Savings Account Rate Increase: 3.75% APY
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WaMu was recently purchased by JPMorgan Chase, for the latest on bank rates, check out the best high yield savings account rates page.
I just received an email that Washington Mutual will be raising the interest rate on their online savings account from 3.30% APY to 3.75% APY. This beats the rates found at FNBO Direct and HSBC Direct. It’s also a sign that interest rates are headed up. (FYI, FNBO’s top rate isn’t a “promotional offer” and has no set expiration date, HSBC Direct’s rate is a promotional offer and is set to expire in September)
With inflation heading upwards, the rate was 1.0% in June 2008, it’s getting more and more likely that interest rates will also move upward to counter. The Fed doesn’t like high inflation rates and will counter with increasing the funds rate, which will in turn increase bank’s interest rates. Whether or not that’s good for your pocketbook in the long run remains to be seen, there are simply too many factors pulling at one another, but a higher bank interest rate is better than a lower bank interest rate.
Update: For some reason I thought FNBO and HSBC were at 4.50% and mis-typed 3.50%, they’re not, they’re at 3.50% and now they lag WaMu.
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C’mon ING, why are you still at a measly 3.0% APR?
I can’t figure out this line: “this still lags against 3.50% APY rate leaders FNBO Direct and HSBC Direct.”
Why does 3.75% APY lag against 3.50% APY?
Whoops, typo, for some reason I thought FNBO and HSBC were at 4.50% (they’re not, they’re at 3.50%). Yikes. Thanks Cameron, I made the correction.
I think this is less a sign of interest rates and more that these guys are in “trouble” and with people pulling money out they have to find a way to get more dough. Check out their stock price.
saladdin
I have to agree with Saladdin on this one.
http://alphaguy.blogspot.com/2008/07/thoughts-of-indymac.html
WM is asset gathering. Of course, that’s really the least of their problems in the first place, but… E*Trade Bank was doing the same thing recently, as was IndyMac a few months ago. A BankRate search showed (until recently it seems) that OneUnited was offering some insane APY was well. Asset gathering.
The problem is that all this asset gathering is just bringing in more funds for them to lend out, and hopefully make enough spread over all of the deposited funds vs. the lending that they can continue paying their bills. Yet the holes in their balance sheets have little to do with deposits; its mismanagement of their (read: shareholder) money.
I personally think WM or WB will go out of business by the time this is all done. Maybe asset gathering slows things down, but we see how well that has worked for everyone else. At least E*Trade has the brokerage business and the small lending operation. For WM and WB, its their lifeblood.
This is really tempting… I’m currently at Countrywide (3.55%) and the transfers are really fast.
But now that Bank of America bought them I’m expecting their rates to drop…