WaMu now offers an online savings account with 4% APY.
On September 23, 2008, WaMu has raised their online savings rate to 4%, which is the best online savings offer with no minimum balance.
To get the 4% savings account you will need to first open a free checking account and then link the savings account to it. This can all be done together online.
Washington Mutual, however, is a very troubled institution and is considered by many to be unlikely to survive. Depositors are therefore reminded that especially in this case to keep deposits below FDIC limits.
Please note that WaMu has not adjusted all of the copy on its site and may still be listing the rate as 3.75% APY in some places.
Online banking has been a hit with Gen X consumers but not so much so with Gen Y. Why? Most likely because Gen Y (15-29 year olds) don't have the money to make it interesting. Would you be interested in logging in to see a balance of $200? How much can you really do if you don't have the funds yet to actively manage?
This, of course, makes me wonder about the future of services like Mint.com. How can online banking on steroids really take route if plain old online banking isn't being embraced by the most plugged-in generation?
Maybe all of this will change once Gen Y start to accumulate their own money. But I think by then, there will be new services competing for their dollars.
The Powershares SKF is one of the new tracking stocks. This one is two times levered short the financials, which means that its movement is twice that of the financial index in a reciprocal manner. If the financials are up, this is down twice as much. This makes the thing extraordinarily volatile and dangerous.
I trade occasionally, and I have followed the banking disaster with great interest. The road is littered with folks who have made and lost a fortune on bank stocks this year (mainly lost if you were long). In mid-July, after the Fannie and Freddie "bailout" and the Wells Fargo earnings, fianncials have rallied. I am not an expert of short-selling and short-selling practices, but I understand that at Lehman's insistence the SEC limited the ability of short-sellers to movea gainst the market, which has added fuel to the rally.
A popular way for shorts and longs to play the financials was introduced last year in the form of the Powershares SKF, a two-times levered short tracking stock. The volatility of this thing has been extraordinary. It came out at $71 a share in October, ran to $150 after the Bear collapse, ran back down to $100, then up to over $210 on July 15 which the selloff reached a crescendo. In less than two weeks, as bank stocks have surged, this has retreated all the way to $111.
And the movement is not straightlined. The thing can experience instant moves of more than $1 in a manner at any time.
According to my friends who trade and friends at hedge funds, this thing now represents the best way to move against the banks. I don't know if the bet against the banks is over (as some, including Sam Cass believe) or if this is just a snap-back rally. But, whatever your inclination is, you should be warned that the SKF is not for the faint of heart or the casual trader. It is, in fact, a heart attack waiting to happen.
