USAA takes only military accounts. WAMU is in deep financial doo-doo.
Doesn’t anyone else get suspicious when a bank offers the highest rates around? I think: “Why are they so anxious for more cash? What is going on?” Then the light goes on: the largest yields are being paid by the biggest subprime lenders, World Savings and WAMu.
Lenders count unpaid interest from option ARMs as income, generating tens of millions of dollars each month. What happens if that income doesn’t materialize? Now their bank reserves are in jeopardy, and they need to get savers in the door ASAP before things go to hell in a handbasket.
Get a Weiss report before you put your money into a bank. By 2008, when your bank goes under, and you wait for the overburdened FDIC to cut you a check, you will wish you had taken .5% less and had your money in hand.
Just remember that banks pay the minimum amount of interest they can. Anytime someone pays more than market rate, something should signal you to ask Why? They either need a large sudden inflow of cash, or they can’t get depositors through the regular channels.
That said, I put money into one of those risky banks too, World Savings. I am taking it out when that CD expires in September, and moving to Treasury bills, state tax free and the safest way to hold dollars.
