Dedicated to Deposits: Deals, Data, and Discussion

5.70% 12-Month CD with Bump-Up at IndyMac Bank


IndyMac Bank is offering a 5.70% APY 12-month certificate of deposit that has a bump-up feature. The minimum is $5K. It's called an Internet Raise Your Rate CD. A one-time increase may be excersied at any time during the term by phone, email, regular mail or in person. The entire balance will start earning the higher rate the day following your request. The original maturity date will remain unchanged.

This bump-up feature may not be needed if the recent trends on interest rates continue. However, it does offer a little bit of insurance of rising interest rates. If the rate was significantly lower than the standard fixed rate CD, this bump-up feature wouldn't be worthwhile. However, the rate is the same as the IndyMac's standard 1-year CD rate. Also, this 5.70% APY is near the top of the market for 1-year CD rates. So there's no downside. Perhaps IndyMac is pretty confident that interest rates have peaked.

IndyMac also has some high yields on other terms including a 5.25% APY 3-month CD and a 5.60% APY 7-month CD. All long-term CDs over 1-year have an APY of 5.65%. With falling rates looking to be more likely, the 1-year 5.70% with the bump-up feature may be a better deal than the 5.60% 7-month CD.

The early withdrawal penalties for these certificates of deposit for terms under one year is 1 month of interest. For terms of one and less than two years, the penalty is 3 months of interest. For terms of two years and over, the penalty is 6 months of interest.

CDs can be opened with the following ownership types: individual, individual with beneficiary, joint tenants with right of survivorship, trust with individual trustee and trust with joint trustee.

IndyMac also has some decent savings accounts, money market accounts and checking accounts which could be useful for depositing CD money at maturity. An ACH link from an online bank could then be used to pull money from this liquid account.

Application can be done online or by mail. ChexSystem is used during the account opening process. A reader noted that they do a credit check (hard?). The reader also noted that once you complete the online application, you have 10 days to fund the CD with a regular check but are under no obligation which could be useful if rates suddenly rise.

IndyMac Bank has been FDIC insured since 1936. It's based in Pasadena, California and it has over $23 billion in total assets. gives it 3 out of 5 stars (performing).

Thanks to the reader who mentioned this CD deal.

Comment #1 by Anonymous posted on
Im still confused on how the bump up feature works. TO bump the rate up on your cd, must the fed raise fed funds rate, or are there other conditions that must apply like you have to wait a certain period of time before bumping up the rate?? The poster said you might not have to bump up the rate, if this is the nearing of the fed increasing rates but if you have that luxery,why wouldnt you raise the rate on the cd? And whats the increase on the bump up? Bump up the rate to 5.75 or 6%??

Comment #2 by Anonymous posted on
All you are doing is hedging your bets with Indy's 1 yr. bump CD. If the Fed DOES NOT pause on Tuesday and states that a Sept. rate hike is still possible, then Indy will follow the Fed and increase the rate on the 1 yr. bump CD until the next Fed meeting. Which means if you opened a 1 yr. bump CD (like I did on Friday) at 5.70%, then you can bump it up to a higher rate like (6.0% is possible
if Sept hike is in play).

With Indy, you can complete the online application and indicate you are funding by check. They will give you 10 days to fund the CD or it will expire. So, that's 10 days to determine if rates are really TOPPED OUT and heading down or maybe another hike is possible by Sept.

I think the Fed pauses this at 5.25%, but nothing in this world is certain!

Comment #3 by The Frog (anonymous) posted on
The Frog
now 5.45%

Comment #4 by Anonymous posted on
This institution seems to be having service and techincal issues. I applied for a CD in mid-August choosing the ACH option for funding and as of Oct 1 it is yet to be funded. Furthermore, they are having problems with the log on for the online banking tool. I've been locked out twice in three attempts and needed to reset the ID, Password, and Security questions each time.

Has anyone else had similar issues? I can't imagine what it is going to be like to redeem a CD and get my money out of the place.

Comment #5 by Anonymous posted on
I have also found technical problems with log-in at the Indymac site. The online chat help is generally ok and can fix the problem, at least temporarily. I'm curious if anyone has had problems having CD funds returned at maturity.