August 28, 2006 at 9:01 AM #7358
WAMU is advertising a 13 month CD at 5.85%apy for amounts over only $1,000.00, no maximum (that I can see)through 9/7. 1-866-808-1396. The fine print does say “fees” may reduce earnings, also does have the “Bump Rate” that allows you a one-time bump up if rates go up.August 28, 2006 at 10:27 AM #33680barnaby33Participant
What sort of fees could they typically charge?
JoshAugust 28, 2006 at 10:44 AM #33685
Not sure if you know this from the previous thread, but USAA has a savings account with a 50k minimum that earns 6.2% for the first 6 months…August 28, 2006 at 12:02 PM #33701powaysellerParticipant
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.August 28, 2006 at 2:26 PM #33760
The fees were only for early withdrawel, the actual interest rate is 5.7%.August 28, 2006 at 2:35 PM #33762
I went ahead and opened an account today, they should be able to last 13 months, WAMU that is, and with FDIC why worry about it. If FDIC can’t pay then money will be useless anyway. This teaser rate is only good until 9/7.August 28, 2006 at 3:47 PM #33771barnaby33Participant
Because as Private Banker mentioned, it could take a long time to get your money from the FDIC. It could also be a major time hassle.
JoshAugust 28, 2006 at 4:07 PM #33774elzocaloParticipant
USAA banking is available to anyone. It is the insurance that is restricted to members.August 28, 2006 at 5:30 PM #33780vcguy_10Participant
This is an example from a developing country, but it may be illustrative. My dad had a big chunk of money in CDs (some in foreign currency), and his bank went belly up. There is something similar to the FDIC over there, but he was still worried about his money. Well, the end of the story is that all those accounts were absorbed by another bank, and there were absolutely no restrictions on withdrawals, etc.
The thing is, if people have a hard time getting their money from the FDIC (say, in case WAMU goes belly up), then people would panic and start withdrawing their deposits even from financially sound banks. This is something the gov’t won’t allow and can easily fix.August 28, 2006 at 9:25 PM #33824LAcrashParticipant
Oops, posted this to the wrong thread originally, sorry to have to re-post: My parents told me that they just put a good chunk of money into a local bank called Premier America Credit Union. Anyone know anything about this bank? Their website shows that they do I/O loans (with a 20% down), and they have a special loan program for those with "modest incomes" even if they have only 3% to put down, and no PMI needed! Hmmmm. Maybe I will need to pull one of those bank-rating reports that Powayseller has mentioned, are those in plain English and comprehensible to an economics/finance layperson like myself?August 28, 2006 at 10:18 PM #33828vcguy_10Participant
Check this website for reliable ratings. CUs and banks are rated separately. Your CU is fine. OTOH, World Savings is not so sound.August 28, 2006 at 10:53 PM #33834
If you can do the 6.2% savings at USAA as a non-military person you should do it. This company is solid. And I have no fears about Wamu going under anytime soon, and if they do our banking system would collapse if the FDIC didn’t make things right. Widespread panic and withdrawals.August 29, 2006 at 1:09 AM #33845CardiffBaseballParticipant
USAA is not available to general public any longer. This stopped somewhere around June 30. For those who are already banking customers, they will be grandfathered in.
If you are already a banking customer you will be allowed to buy CD’s, arrange for credit cards, loans, etc.August 29, 2006 at 9:18 AM #33859powaysellerParticipant
vcguy, Bauer’s not good. They give Everbank and World Savings 4 stars! Weiss does the real digging, and Everbank is E-. Weiss doesn’t do CU.
We could have another S&L crisis in 2007 – 2009. It’s happened before when housing went bust. FDIC will return your money, eventually, you may have to wait awhile.August 29, 2006 at 10:23 AM #33869
That’s why I love USAA. In the unlikely even they collapse, the government should be especially sure to look after them because their customers are our military. I bet at least 50% of military folks use USAA.
If you have a father, mother, close relative who is a vet or in the service I rec seeing if you can join. Once you join, you are in for life even if you have no products with them.
- You must be logged in to reply to this topic.