We expected it would happen and today Washington Mutual cut its savings and cd rates. They were once some of the top rates in the country but they have now dropped off the rate tables. RIP.
Until today, WaMu was offering a 4% APY savings account that was tied for #1 as the best savings or money market rate in the country. That rate is now 3% APY. Their 1-year CD was paying 4% APY, also the best in the country and a great deal but the rate has been dropped to 3% APY, removing it from the best 1-year cd rates table.
For savers, it's a sad day. WaMu offered an easy account opening process and we hardly heard any complaints about the bank. There is little chance that under Chase, WaMu will return to its pro-saver days. With rates expected to drop, we hope everyone who wanted to got the getting while it was good.
Capital One is offering a $50 bonus for opening a Capital One Savings account and funding it with $25,000 within 30 days of opening it.
Capital One is offering a clandestine $50 bonus to open their high yielding savings account and fund it with $25,000 within 30 days of account opening. The offer only seems to have been marketed in san Francisco although nothing in the language would prevent anyone from another location from opening it. Banks often test regional offers and while they are open nationally, they simply don't advertise them. The Internet though means that once words gets out, an offer is national.
The Capital One Savings Account is one of the best savings rates available. If you open the account with $10,000, the account yields a 3.55% APY. If you are a Costco member, you can get a 3.75% APY,
To get the $50 offer you must:
Open the account by October 31, 2008 and deposit $25,000 within 30 days from account opening. It does not say you have to keep the money in the account, although to receive the highest possible APY you w/ill need at least $10,000.
Fund the account with money not already in a Capital One account.
Use the offer promo code BONUS50 at the time of account opening.
Capital One received 3 1/2 starts out of 5 from Bauer Financial for its safety and soundness. That's a decent score and you can see how this compares to other high yielding banks on the BestCashCow rate table.
Thanks to Banking Guy at Bankdeals for finding this offer.
In a surprise move, Wachovia scrapped its deal with Citi and agreed to be acquired by Wells Fargo. Wells not only agreed to buy the whole bank, but raised its offer price and did the deal without any government assistance.
Just last week, Citi reached a deal to purchase the consumer banking operations of Wachovia for $2.2 billion or about $1 per share. That deal now appears dead. Instead, Wells Fargo will be purchasing the entire Wachovia organization, including the asset management and brokerage business for a higher price and without any government guarantess.
"Under terms of the agreement, which has been approved by directors of each company, Wachovia shareholders will receive 0.1991 shares of Wells Fargo stock in exchange for each share of Wachovia stock. The transaction, based on Wells Fargo’s closing stock price of $35.16 on Thursday, is valued at $7 a share. Wachovia has almost 2.2 billion common shares outstanding. The agreement requires the approval of Wachovia shareholders and regulators."
For Wachovia shareholders, this is a far superior deal. It also provides a glimpse of how banks negotiate with one another. According to the WSJ, Wells Fargo was prepared to buy Wachovia last weekend for $20 billion and without any government support. It then abruptly withdrew its offer. Faced with a rating downgrade at the same time a chunk of debt was coming due, Wachovia scrambled to save itself and did a distressed deal with Citi. Wells Fargo then came back and offered $5 billion less, or $15.4 billion. Even at this lower price though, Wachovia shareholders have to be happy that they are now getting $7 per share versus the $1 per share offer from Citi. It's unclear how much Wachovia's asset management group and brokerage would have fetched for shareholders if sold on its own.
Wells Fargo, along with JP Morgan and Bank of America, now becomes one of the big three banks. Together, these institutions have 30% of the nation's deposits. From a rate standpoint, don't expect to see any of these banks offering BestCashCow style returns. These are McBanks, and they provide coverage, convenience, but not a great return. Consolidation will only decrease the pressure on them to offer rate competitive products.
