WaMu Promotion: 5.00% APY for 12-Month Online CD
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I am not a fan of Certificate of Deposit (CD). In fact, the only CD I ever had was a 1-year $5,000 CD about 10 years ago with my local Summit Bank (which later became Fleet Bank, then Bank of America). Back then, there was no high-yield online savings accounts as we have now. So the only option for a better rate was to have a CD. Now, things are a lot different than a decade ago. With online savings account rate as high as 4.76% APY, I really don’t see the need for a CD. I like the flexibility of savings account and still get a pretty good rate.
But that’s just me. If you like CDs, then here’s a chance to lock in a good rate. Washington Mutual is now offering 12- and 13-month online CDs with a 5.00% APY. The promotion starts today, 08/23, and will end on 08/28 according to Fatwallet.com. The T&C of this promotion are as following:
Minimum deposit to open and obtain APY is $1,000.00. To obtain the APY for the effective date on the day you apply, the Online CD account must be funded within seven (7) calendar days. If received on or after the eighth calendar day, the then effective date APY will be applied.
If looking at the rate itself, then 5.00% APY is very impressive. However, we know WaMu has been hit very hard by bad loans. So before taking advantage of this offer, you may want to think about whether you want to make a 1-year commitment with a bank that isn’t in a good shape financially.
BTW, WaMu also has a online savings account with 3.75% APY, also significantly higher than most of its peers.
Update: This offer has expired. Check out the latest online savings and checking account interest rates for currently available offers.
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Are CDs covered by the FDIC, or is that protection only for savings accounts?
Yes CDs are FDIC insured.
One reason for using CDs would be to lock in great rates. If you had locked in 1 year CDs back when the rates were sky high you could have skipped much of the downturn in rates but of course you would have been taking a risk that rates would continue to rise instead of falling like they did.