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Best Online Savings & Money Market Account Rates 2024

Best Online Savings & Money Market Account Rates

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Wells Fargo to Buy Wachovia, Citi Left Out

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.

The NY Times reports:

"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.


Washington Mutual (WaMu) Still Offering Savings Account at 4% APY and 1 Year CD at 5% APY after JP Morgan Chase Takeover

Rate information contained on this page may have changed. Please find latest savings rates.

I just called WaMu and asked if they were still offering high rates after being sold to JP Morgan Chase. The news was good.

I just called WaMu and asked if they were still offering high rates after being sold to JP Morgan. The woman on the phone told me the 1 year CD at 5% APY and the 4% APY savings account were still active. This is a great opportunity. You can technically get very competitive rates with the security of JP Morgan Chase.

I don't know how long these rates will last. Judging by what happened to Countrywide rates after the Bank of America takeover, I'd judge not that long. But for now, they are a great opportunity for yield and safety.


Washington Mutual (WaMu) Raises Online Savings Rate to 4% APY

Rate information contained on this page may have changed. Please find latest savings rates.

Washington Mutual (WaMu) has raised the rate on its online savings account from 3.75% APY to 4%. This is the top rate in the country according to the BestCashCow rate table.

Update: September 26, 2008

Last night we learned that Washington Mutual (WaMu) was seized by regulators and then its deposit and loan business sold to JP Morgan Chase for $1.9 billion. Long term, the WaMu brand will disappear and all deposits in WaMu will be converted to Chase. Thus, if you are a WaMu account holder you will become a Chase customer. From a customer standpoint, this will look like a bank acquisition.

WaMu is open for business and is still offering some of the best rates in the country. A call to the bank verified that it is still offering its 4% APY savings account and a 5% APY 1-year CD. The 4% savings account is the top savings account rate in the country while the 1-year CD rate is also the best rate according to the BestCashCow rate table. As an added bonus, there is no minimum balance and you now get the security of Chase backing up your deposit.

To receive the high savings rate, you must open a checking account with the savings account. The checking account also doesn't have a minimum balance and is free. Both accounts can be opened together online. WaMu has received high marks for the ease of its account opening process.

>> Learn more about WaMu's 4% Savings Account here.

To see how this rate compares to other high yield savings accounts, please visit the BestCashCow.com savings and money market rate tables.