I noticed WAMU is still offering the 1yr CD at 5%. I understand Chase could decide to decrease the rate as they see fit, and holders would have the option to stick with Chase or redeem their CDs (including earned interest) without an early withdrawal penalty. But for now they're honoring the 5%. What do you think about putting cash reserves in a WAMU CD post collapse?

 
With all the high yield CDs out there and the economy in flux, bank failures seem more likely now than ever. FDIC insures principal AND earned interest under the specified limits, correct?