Dedicated to Deposits: Deals, Data, and Discussion

5.75% Money Market Account for $25K+ Tier at Indymac Bank

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Indymac Bank is listing a yield of 5.75% APY for balances over $25,000 on its Internet First Rate Money Market. Balances between $1k and $25k only earn 1.70% and 1.80% so you definitely want to make sure your balance stays above $25k. Standard features that are listed at the website include:
  • $1,000 minimum to open
  • $1,000 minimum balance to earn interest and to avoid $7/month fee
  • Three checks per cycle allowed
  • ATM access is available. No ATM charges by Indymac, but no refunds of other banks' fees.
  • No bill pay or Visa check card available
  • May not be available in all states

More info on fees is available at this Indymac fee page. This fee page is the same for all their products so some fees may not be applicable for this money market account. Some important fees to note include:
  • Initiating funds transfers cost $3 for standard outbound and $8 for premium outbound. Inbound transfers are free.
  • Incoming wire transfers cost $10 (except for when account is opened)
  • Outbound domestic wire transfers cost $30

Since this money market account is different than the one I list in my weekly update, I overlooked this rate change (Thanks to the FW MMA thread for the update). I don't remember this Internet First Rate Money Market account having any competitive rates in the past. From Google's cache, I noticed that the rate was only 1.90% and 2.00% APY for balances over $25K on July 25th. I also find it strange that Indymac isn't advertising this change on its main webpages. I'll have to call tomorrow to see if it's for real and how long this 5.75% yield may last.

Indymac also has some very competitive CD rates. The 5 and 12 month CDs have a yield of 5.55% APY. The minimum deposit is $5,000.

Indymac is another bank that's heavy into mortgages and is being hurt by the current credit problems. Standard & Poor's Equity Research recently downgraded Indymac stock to a strong sell. Bankrate.com gives Indymac 2 out of 5 stars (below peer group) based on 3/31/07 financial data. The bank is FDIC insured (FDIC Certificate # 29730).

  Tags: savings account

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Comments
14 Comments.
Comment #1 by Anonymous posted on
Anonymous
Based on your posting and others like it, I put $6,000 into an IndyMac bank CD. It's for six months. I'm scared by all the negative news about this bank. If Indymac Bank collapses, will I lose my money? I know it's FDIC insured, but what does that mean, exactly? Help!!

1
Comment #2 by Anonymous posted on
Anonymous
That means that if all of your deposits at Indymac Bank total less than $100,000, the FDIC will give you back the amount of your deposit plus interest up to the day of the collapse.

In almost all cases, the FDIC arranges with another bank to open new accounts before the failed bank closes. Typically, the bank is closed on a Friday afternoon and insured accounts are transfered to the new bank bank by Monday morning.

In the extremely rare case where the FDIC cannot work out a deal with a new bank, they will mail you a check for the balance in your account within a few days.

If you have more than $100k, then they will return the first $100k to you as described above. They will then try to liquidate the failed bank's remaining assets. Any money raised by liquidating the assets will first be used to pay administrative expenses and then will be distributed to pay back uninsured account holders.

It is possible to have more than $100k insured at a bank by judicious use of joint accounts and qualifed trust accounts. Retirement accounts (such as IRAs) are insured to $250k per depositor.

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Comment #3 by Anonymous posted on
Anonymous
IndyMac has been changing its CD rates on a daily basis. How long do they give you to fund the CD at the day's rate after you've applied online?

1
Comment #4 by MrFrugality (anonymous) posted on
MrFrugality
According to a CSR at IndyMac bank late last week, they have a 12 day rate lock on their CD's. This is a good rate lock period and very beneficial in times of rate change uncertainty.

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Comment #5 by MrFrugality (anonymous) posted on
MrFrugality
Actually, Banking Guy, as of afternoon on Sunday, August 12, the rate for the Internet First Rate Money Market account at Indymac IS indicated as 5.75% APY on the rate page for this account. The latest update to their rates shows as August 11. I'm not sure, either, when that 5.75% yield was initiated.

1
Comment #6 by Anonymous posted on
Anonymous
Yes, the 5.75% APY rate is for real (for the time being), as is the 5.55% APY 5-month CD. As for what occurs when a bank fails, the scenario outlined above is precisely what happened to insured deposits when my bank failed a few years ago. The process was actually rather transparent.

1
Comment #7 by Anonymous posted on
Anonymous
I tried to open the money market account with $50K. After entering all sorts of personal data and checking "no" to question whether I also wanted a CD, their web page would not let me complete the process without ordering a CD.

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Comment #8 by Banking Guy (anonymous) posted on
Banking Guy
I would suggest calling although it seems to take at least 10 minutes to reach a CSR. I called yesterday afternoon and I was told that this could be opened online or by phone. The CSR didn't mention that this MMA had to be opened with a CD.

The CSR confirmed the 5.75% APY on this MMA, but could not provide any other insights into this rate such as if it were a temporary promo rate or how long it may last.

I was told that the first book of checks is free and there is supposedly no hard credit pull (although the CSR didn't seem too knowledegable).

You can fund the MMA or CD with a check or by wire transfer. If you fund the CD by check, I was told they give you 11 days to receive the funding before you would get a different rate than the rate in effect at the time of the application.

1
Comment #9 by Mitch from New Jersey (anonymous) posted on
Mitch from New Jersey
I have had experience with owning Indymac CDs. The customer service was preyty reliable, as was the monthly payment of interest by ACH. To open an account, it's best to do it by phone and complete the process by mail than to attempt it online..

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Comment #10 by Anonymous posted on
Anonymous
Anyone has experience with rate history for this account? Seems like it's primarily based in CA. Anyone from other states has luck in opening the account with 5.75?

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Comment #11 by Anonymous posted on
Anonymous
What are the ACH transfer limits using their website? Do they allow remote ACH push / pull. Thanks.

1
Comment #12 by Anonymous posted on
Anonymous
While the "First Rate" Money Market account requires a higher minimum, and the rates drop precipitously below that minimum, their "regular" money market savings account has a 5% yield at only 10K minimum.

1
Comment #13 by Anonymous posted on
Anonymous
According to the INDYMac website, as of Oct. 8th, the internet money market rate dropped again to 5.50% APY for balances above $25,000. Still a good rate though. Are money market accounts FDIC insured?

1
Comment #14 by Anonymous posted on
Anonymous
OK, here it is Oct 17. Looks like the rate has dropped again. Down to 5.25%. Is there anybody still offering 5.50%?

1