Washington Mutual was seized by FDIC on Thursday night in the largest bank failure of a U.S. bank, and its banking assets were sold to JPMorgan Chase for $1.9 billion.
As a customer of WaMu, I’ll get to experience the change of hands firsthand. So far, so good. Despite all of the dramatic news coverage about people pulling their money out of WaMu, I left mine in there, and guess what? It’s still there!
For most customers, there’s really no reason to panic, and there never really was one in the first place. However, with all of the media hype about the financial crisis, it may be hard to resist.
Photo by Julian Bleecker
So why shouldn’t you panic if you’re a WaMu customer?
Customers of WaMu, based in Seattle, are unlikely to be affected, although shareholders and some bondholders will be wiped out. WaMu account holders are guaranteed by the Federal Deposit Insurance Corporation up to $100,000, and additional deposits will be backed by JPMorgan Chase.
Source: NY Times
That’s right. All deposits, even those over the $100,000 FDIC limits, are still safe after being acquired by JPMorgan Chase.
What should you expect during the transition?
“There will be no interruption in services and bank customers should expect business as usual come Friday morning,” FDIC Chairman Sheila Bair said in a statement.
Source: CNN
The transition should be fairly seamless. Branches will still open on Friday, bill payments will go through, checks will clear, and online services will still work. Your account number even stays the same.
Where are the rest of the details?
There hasn’t been an official press release, so all of the details aren’t available yet. For example, I’m wondering if the interest rate will change on the 4.00% APY Online Savings account.
As you can see, there’s really no reason to panic, so save yourself some time and WaMu employees some stress by not rushing to the bank to pull out your money.
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Good point about not panicking BGS. I hope the transition for you is smooth. Do you plan on keeping your money with JP Morgan o do you think you’ll move it?
I’m planning to keep my money with JPMorgan unless something drastically changes as the companies merge over the next few months.
Kristin just wrote an article about the same topic over at Twenties Money Magazine. I’m hoping to get some further information about this come Monday from a friend of mine. His wife worked for WaMu and has been in meetings all day about what’s going on with everything. It is really startling to see all of these major banks going down while I sit and consider how I have a small town credit union. The thought does cross my mind; “well if these major banks are falling…where does my small bank stand.”
I used to have an account with WaMu (live in the UK now). I can’t believe how many banks are simply collapsing in the US. All from sub-prime mortgages right? Flippin’ heck.
We’re feeling it over here mind you but every day it just seems like it’s getting worse. Are you (the common folk lol) feeling it much or how is the typical student/family coping?
Thanks for the tip. My parents have money at WAMU. I’ll pass this along to them.
BGS-
Great article. Here’s an article that gives a peek as to what some other WaMu customers are going through: http://www.thestranger.com/seattle/Content?oid=677626&c=hp
what will happen to our online savings account? does chase have an online savings account too? or would they transfer the money back into the checking acct?
Chase has posted a welcome page for WaMu customers and also a link to more details on the FDIC coverage. From the FDIC link, I found this information:
It looks like we’ll be getting the same rates in our online savings accounts for now. This also means we can still take advantage of the 5% online CD rate, since Chase is honoring those as well.
However, things may change as the merger gradually moves along. Based on the info from the welcome page for former WaMu customers, it doesn’t sound like we’ll be seeing much change very soon:
The important thing to note is that Chase will let us know in advance about the changes, so you won’t just wake up one day with all of your savings transferred over into your checking account.