WaMu/Chase Dropping Their Interest Rate

Posted on | October 8, 2008 |

I just learned from Flexo at Consumerism Commentary who learned from Five Cent Nickel who heard from a reader, William, that Washington Mutual is dropping the interest rate for their on-line savings accounts.

It’s true. I immediately logged into my WaMu account and checked. Sure enough both my account and The Daughter’s shows an APY of 3.0% effective 10/09/08. I checked last month’s electronic statement for the same accounts – they had been earning 3.75% APY.

This news is not enough to get me to start bank shopping however. I have been more than happy with WaMu since opening my initial account 2.5 years ago. On the other hand, I have heard that Chase has a phenomenally low customer service rating. Now lousy customer service would definitely spur me to find a new bank. And if my local WaMu branch is shut down, that also might be incentive enough to move banks. But for now, I’m staying where I am.

Including my children’s custodial accounts, I have 7 WaMu accounts.

I moved The Son’s accounts to WaMu about two months ago when his timed savings account at a different bank matured. Now he has:

a 13-month CD earning 4.5% — current balance: $1,284.34;
a regular savings account earning a laughable 0.25% APY with a current balance of $65.01 (he also has quite a bit of cash in his wallet that needs to be deposited). [Note to self: get The Boy to the bank.]

The CD, obviously, was opened to yield as high of an interest rate as was currently and conveniently available. The smaller regular savings account is where he’s supposed to stash any incoming cash until he can save enough to open another CD.

The Daughter has three WaMu accounts. These are:

her checking account with debit card. It earns absolutely no interest but it is a free checking account with no fees, no minimum, and free checks (not that she writes checks but if she did, they’d be free). The balance in that account: $54.24.
attached to that checking account, The Daughter also has an on-line savings account. This is the type of account that took the interest rate hit. Starting tomorrow, her interest rate on this account will drop to 3.0% APY. That account’s balance is $50.21.
a CD. Like her brother’s, it’s a 13-month CD yielding a 4.5% APY on a current balance of $1.751.40.

Both her savings and her checking account balances are rather low at the moment because she used the funds she’d earned and saved during the year to fund her last summer as a footloose and fancy-free jobless teenager. She’ll slowly build up the balance of her savings account as she continues to earn a weekly income for providing child care at church.

Mind you now, the kids’ various accounts have been built up over time mostly on the strength of saving their paltry weekly allowances. Each CD contains a cashed-in savings bond but the rest of the balances represent their hard-earned savings. No gift money or free rides.

I, personally, have two WaMu accounts.

One is a free checking account just like The Daughter’s — no fees, no minimum, no interest earned, and lifetime free checks. I do write checks though not many — it’s just a little personal account that I fund with a small part of each paycheck to cover my church donations, my library fines, and the occasional odd or end. That account is flush right now with a balance of $399.70 because I recently transferred $200 from my savings so I could, in turn, transfer $200 to my Sharebuilder account.
My second account is an on-line savings account — the one with the dropping interest rate. That account has a balance of $1,193.38.

As you can see, even when all added up, our WaMu deposits aren’t huge. We’re certainly not talking about enough money to warrant a lot of time and effort in searching for a different bank with a higher interest rate and then going to the effort of moving everything over and getting new cards, new pins, and new checks for everyone. WaMu’s high on-line savings account interest rate was nice while it lasted. I have a feeling that before this economic mess is over we’ll be considered ahead of the game simply in the fact that we have savings accounts earning any interest at all.

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