Washington Mutual Raises Online Savings Rate to 4%

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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.

For more information, see the BestCashCow.com savings and money market rate tables.


Online Banking Not Being Adopted by Younger Users

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Online banking has been a hit with Gen X consumers but not so much so with Gen Y. Why?

Who's Banking OnlineOnline 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.

Get the best online savings rates here.

 


Depositors Insurance Fund (DIF) Provides Protection to Funds to $1 Million for Some Massachusetts Savings Banks

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Many Massachusetts savings banks have additional insurance for deposit amounts to $1 Million from the Depositors Insurance Fund (DIF). Chartered in 1934, no depositor has ever lost a penny in a bank insured by both the FDIC and the DIF.

Deposit Insurance FundMany Massachusetts savings banks have additional insurance for deposit amounts above $100,000 from the Depositors Insurance Fund (DIF).  All deposits held in member banks above $100,000 are insured in full by DIF.  The location of the depositor or the branch does not impact the coverage. Thus, a resident of California that wants to open an account at a DIF member bank in Massachusetts is fully covered.  Out-of-state branches of a participating Massachusetts bank are also covered.

DIF not a government program but instead a privately funded program to protect the soundness of Massachusetts banks.  The DIF website states:

"The DIF has over $300 million in assets, plus an additional $100 million of reinsurance. During the recession of the early 1990s, the worst financial period in the history of the Massachusetts savings bank industry, the DIF paid out more than $50 million to protect over 6,500 depositors in 19 failed member banks. Yet the DIF emerged from this period financially stronger than before the recession began."

DIF reviews the financial statements of its member banks on a quarterly basis to ensure their soundness and is "examined annually by the Massachusetts Division of Banks and audited by an independent auditor."

A list of DIF banks is here