bank rates

JPWaMu – What You Need to Know

The whole world and their mothers have heard by now that JPMorgan Chase & Co has acquired the WaMu consumer banking empire for the firesale price of $1.9bn.

With this deal, JPMorgan storms into the consumer banking business overnight by acquiring WaMu’s $905bn in deposits and 5,400 national branches.

What You Need to Know
As JPMorgan slowly integrates the WaMu business, I am pretty sure that WaMu’s highly competitive savings rates and CD rates will have to come lower. WaMu was paying out extremely high rates because they were desperate for capital. Even other banks (ala bonds / money markets) were hesitant about lending to WaMu. With JPMorgan at the helm, this is no longer the case.

With Change Comes Opportunity
For you money savvy Bankaholics, this is your opportunity to dump your money into WaMu’s 5.00% APY 1 year CD account before JPMorgan wises up and pulls the plug on this killer promotion! Lock in this rate while you can! With JPMorgan’s monstrous $165bn market cap backing WaMu, you can rest assured that your money will be safe.

Good luck.

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Comments (12)
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12 Existing Comments
  1. B A Fant said:
    on September 27th at 08:29 pm

    9.27.08 Just opened a WaMu 13 month CD at 5.00 APY. This in branch promo also require you to open a free checking account with a minimum deposit of $25. You can have the monthly interest deposited into the new account, an interest check mailed to your home monthly or just let it ride. JPMorgan Chase may reduce the rate at any time but the manager I dealt with said it is highly unlikely, as this great rate was designed to lure customers back that left WaMu recently

  2. john said:
    on September 29th at 03:29 pm

    Is this safe to invest in 5% CD 1 Year at WaMu? How long will the rate last?

  3. Dee said:
    on September 29th at 03:30 pm

    Hello, I am interested in opening a CD account for WAMU, this would be my first CD account and my question is, would this be a good investment? Will the rates change at all if I do a 12 month terms at 5.00 APY?

  4. Roger said:
    on September 29th at 06:28 pm

    John and Dee… The 5% rate is fixed for the entire length of the CD. That is the point to most CDs, that is, the bank gets to lock up your money from you for a determined period. In return the bank gives you a higher interest rate. Remember, if you withdraw money before the end of the CD period, you will incur penalties. Usually the penalties are 3 months interest earned or unearned on money withdrawn for CDs up to a year and 6 months for CDs great than a year (watch out for those 13 month CDs – they usually fall under the 6 month penalty) And yes it is safe as longs as your deposit is FDIC insured and you follow the FDIC rules for deposit totals.

  5. Ian said:
    on September 29th at 10:58 pm

    WaMu and JP Morgan COMBINED will have $905 billion in deposits and 5400 branches. WaMu itself had slightly less than $200 billion in deposits and 2239 branches. Additionally, JP Morgan’s market capitalization has nothing to do with its actual strength, it is simply the value of all its stock added together. There may be a correlation between market capitalization and the strength of an institution, but as WaMu proved, market cap can be one thing one day and entirely another thing in a couple of months. A better indication of strength is capital ratios and asset quality within JP Morgan’s portfolio. JP Morgan’s Tier 1 capital ratio is approximately 8.0%-8.5%, which is significantly above the regulatory minimum of 5%. JP Morgan has remained profitable, though not as profitable as they have been. This suggests that their asset quality is probably decreasing (since the cost of funds is generally down across the sector) but that it hasn’t decreased enough to make them unprofitable. You can probably find more information pretty easily by googling their ticker symbol, JPM.

    Check out the following link for information regarding JP Morgan and WaMu:

    http://seattlepi.nwsource.com/business/380607_wamu26.html

  6. Michael said:
    on October 3rd at 11:57 am

    I applied to get a CD, got so far in the process and had to call WaMu…I was told that the best and fastest way to fund this CD was with a check. So I transfered money from a high yield MMA into my checking account, which takes 3-5 days…only to find out that once you get so far in the online CD process it indicates that you can fund the CD directly from any account. Again I call WaMu and this time I’m told that you can open as many CD as you’d like…Great…so, I try and open another CD and I get locked out for 7 days. Not impressed with customer service and not impressed with the information provided to me prior to starting the CD opening process. I’m actually glad that I wasn’t able to purchase the $CD, the rates are going up across the board anyway. JMO>

  7. Steve said:
    on October 3rd at 10:18 pm

    Hello, first off I want to say what a great resource your site is, I have used it to learn about banks I never even heard of. I have a question about cd rates. I have been looking at short term 1month cd’s. What is the actual earnings on 3.50% apy cd for 30 days if I have $10,000 invested?

  8. Lando said:
    on October 3rd at 10:28 pm

    With the new bailout plan approved, I suppose that cap for FDIC insurance is now at $250K for individual account? I suppose this also applies to CD accounts?

  9. Jason said:
    on October 6th at 04:16 am

    Thanks for the tip. I’ve been following the posts on this site and this is such a valuable resource. Please keep up the great work.

    I just opened a WAMU account this evening. I clicked the link in this posting and filled out the online application. I didn’t have any issues although I had to re-read their fees rates & schedules just to make sure. A posting by BA Fant above (9/27/08) indicated that a $25 checking was also required to open the account. Fortunately, I wasn’t prompted to do that.

    I funded my account by online and entering my bank’s routing number. At the end of the app process, it said to wait until WAMU puts in 2 small deposits to confirm.

  10. surferdude said:
    on October 7th at 02:03 am

    Steve,

    You will get $28.71 for a 1 month investment of $10,000.00 at the APY of 3.5% compounded daily.

  11. jimmy said:
    on October 8th at 04:30 am

    @jason be careful they changed the rates today 7th down. you only have 7 calender days to fund the account otherwise you get the new rate. for the 12 month it is only 3%

  12. Professor said:
    on October 19th at 03:06 pm

    I tried to do that one year cd at 5%.
    WM made me do it online and they messed up with those microdeposits.
    I just gave up and did a 3 year cd at 5% elsewhere. That credit union took the routing and account number and it was over. With WM it would never have happened in the 7 day period and I would have been locked in at 3%.
    They are the worse bank I ever dealt with. I go past their branches every day and it would have been so easy to give them a check. But the branch said they can’t acept it while he online ‘service’ tells me I can drop off the check. I hope JPM fires all of these morons.