While no one will ever label investing in certificates of deposits sexy, you can't blame Washington Mutual
Taking a page out of the Priceline
Banks have historically paid crappy rates on CDs. If you're a customer doing business in person at a branch office, they know that you are as good as captive. Depending on where you live, Washington Mutual is paying out either 0.95% or 1.00% on its four to eight-month CDs.
But that's not good enough in the online world. Rival banks are just a click away, so rates have to be competitive. Head out to our Savings Center and you will see MBNA
That's why the real surprise isn't that the rates on the Washington Mutual auctions are coming in a few basis points above the walk-in rates. No, that's a given, and it's why Washington Mutual probably doesn't want its existing customers to be lured into its own auctions. The real shocker is that folks are bidding those CDs down to 1.2% -- or less -- when the virtual world is considerably more rewarding.
And, yes, this is eBay doing reverse auctions here. Unlike its flagship marketplace where members bid items higher, these standalone offerings have potential clients bidding yields lower.
But that's the power of eBay, isn't it? You won't see other Web-based auctioneers like Yahoo!
So, just remember to check the next time you want to buy a CD from eBay. You may find money -- not music -- inside. Then again, money might be music to most ears.
So, what do you think of eBay and Washington Mutual teaming up to auction off CDs online? Will it help -- or hurt -- Washington Mutual? What will eBay do next? All this and more -- in the eBay discussion board. Only on Fool.com.