Saving account - interest rate question. Wamu.?

Question

I have a checking account w/ Wamu and a certain amount in it. I know it doesn't have interest rate - basically, if I got $1,000 in there, then if I were to withdraw $500, there would be only $500 left. And if I deposit $200, there would now be $700. Basically, it's deposit/withdraw type of account.


Now, I just got a gift from a relative for $35K. That money will be use to pay new monthly mortgage. Now, someone told me to put that money in a saving account. However, I am confused on what it means to have an interest rate for them. For $25K to $49K, the interest rate on a "Guaranteed Great Rate Money Market Account" is 1.88 and APY of 1.73.

Does that mean, money get deducted each time I deposit from my saving account? Say, I deposit $2,000, then it would only be (2,000 - 37.6) = $1962.4 that gets deposited?

In that case, wouldn't it be better getting an additional checking account without the deduction? or monthly service charge?

Answer 1

First of all you should try a bank that pays A LOT more on interest than WaMu. Try ING direct or CITIBANK they're doing a promotion with like 5.00 APY. You would be getting a lot back for your money. You get interest on what the balance on the account is. You can withdraw anytime you like, it's basically an account with higher interest. With that amount I wouldn't settle for 1.88, it's pathetic. Nothing gets subtracted from your account, they pay you interest no matter how much you withdraw.

Answer 2

I am a Wamu customer and this is what I do.

First of all they have free checking which includes free checks and although it does not pay interest, I do not have to have a minimum in the account. I keep so much in there to pay bills and thats it. No service fees.

I also have a Money Market Account. Wamu has several Money Market Accounts. I use to have the Guaranteed Great Rate Money Market Account, but then I changed it to Money Market Savings which pays about a 3% or better depending on what the Federal Reserve does.

Please go and talk to Customer Service and tell them that you want the best Money Market Account for your money. They will show you a sheet showing you the different money market accounts that they have. For me, it was the Money Market Savings that pays approximately 3%.

Also, please tell Cusomer Service that you want the free checking account with the free checks and no service fee.

They will help you. You just need to speak to Customer Service. Good Luck to you.

Answer 3

I suggest spending a few bucks of your $35k on a session with a good financial advisor. A good advisor will give you more options on how to preserve and grow your capital and maybe can even suggest some ways to reduce taxes. The cost will be far less than the cost of a bad decision.

I absolutely would not put it in a savings account with a 1.73% interest rate. By the time that you factor in taxes and inflation, this account COSTS you money every year as measured in purchasing power. You need a higher return to compensate for that.

If you feel that you must put it in a bank savings account, check www.bankrate.com. They will list rates for savings accounts at other local banks and also for Internet banks. You should have no trouble beating 1.73%, probably by a lot. (I get 4.2% on my bank account and I know of some that are a little higher.) You may also want to consider a mutual fund money market account. They're safe and often have higher interest rates than bank accounts.

Answer 4

Basically there are two kinds of a/c
.
1) Checking a/c where you have a check book to make easy transactions, but receive very little, if any, interest and

2) A deposit a/c where you have no check book, can only transfer money by writing to the bank and where you get a lot of interest.

Ideally you should have both. One for easy transactions and keeping only a couple of $thousands in it and the other to keep most of your money and collect max.interest. Naturally, shop around, read the leaflets they have and chose. Some of the best rates are on the Internet.

Answer 5

cut to the chase you have a gift horse of 35k -- lets pay kiss (keep it simple stupid) say you payment is 1K per month -- i would take 6k and put aside for for 6 months payments and take the other 29 and buy 29 laddered cds coming due every month for the next 29 montys == the first one will make about 30 dollars and the last one maybe 90 or so dollars!!!

Answer 6

The bank pays YOU interest on the savings account.

Answer 7

where are you located? if you're in Australia, go with BankWest. Their online savings acct (Telenet) is at 7% for the first year, then revert to 6.5%.