In January, thinking that stocks wouldn't go anywhere for the next two quarters while interest rates would go down, I bought a six month 5.1% CD from Washington Mutual. The CD has matured. As the rate offered for another six month CD is 2% and interest rates are expected to remain steady or rise, I just moved the money into my savings account. The yield there is currently 3.3%.
The S&P 500 is down around 12% since January, so I guess I made the right choice (relatively speaking, of course--an energy stock ETF would've been much better).
I'm not sure how long I'll keep the money in savings. Procter & Gamble looks tempting, as do Johnson & Johnson and Kraft. Pfizer had looked interesting to me six months ago, but I've soured on it a bit.
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I hope your savings account is not in WaMu. Looking at their current price (90% down since last year in July) I will not be too surprised if they go down.
Hi Holden,
The savings account is WaMu. I don't have a lot of money there, and it's being transferred to a brokerage account.
I've been wondering about WaMu's future for a while now. I really like the bank in terms of customer service, ease of use, no fees, and good interest rates. It's a shame that it'll probably go under.
I've read recently that the FDIC has only $53 billion in insurance funds. The California bank that just collapsed had $17 billion in deposits. So what happens if WaMu goes down?
If the FDIC has trouble paying off account holders, would any bank be safe in the ensuing panic?