Dedicated to Deposits: Deals, Data, and Discussion

Indymac Bank's High Yield E-Money Market Account

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Update 7/11/08: FDIC puts Indymac Bank into conservatorship. See post for more details.

Update 6/07/08: The top yield now only applies to balances over $10K.
Update 5/31/08: The yield has fallen to 3.85% APY.

Indymac Bank is offering a new savings account called E-Money Market that pays 4.05% APY on all balances over $1,000. The minimum to open is $1,000, and the minimum balance to avoid a $7/month fee is $1,000. Also, there's no interest if the balance falls below $1,000. It's similar to their Super Savings account in that check writing and the Visa Check Card are not available.

You have to wonder how long they'll keep the rates competitive for the lower tiers. It reminds me of their Internet First Rate Money Market Account. Last August they started offering 5.75% APY on this account for balances over $25K. It still has a relatively high yield (currently 4% APY), but this top yield now requires a balance of $75K. The yield is only 3% APY for balances of $25K.

For those who have Indymac CDs, a liquid Indymac account can make it easy to close a CD. You can just call and have them close the CD and transfer the amount into the liquid account. This E-Money Market doesn't offer checks, so the best way to transfer money out would be with an ACH transfer initiated at another bank (like at GMAC or ETRADE). Indymac does offer an ACH transfer service called Move Money. A reader reported that they limit the transfers to $5K a day. The CSR told me the limit is now $15K a day. These limits do not apply if you initiate the ACH from your other bank.

The only competitive CDs currently being offered at Indymac are the 12 and 18-month CDs which have a yield of 4.15% APY. For more information on these CDs, please refer to my previous post.

As one of the largest mortgage lenders, Indymac is being hit hard by the mortgage problems. This CNN article reports on analysts increasing their 2008 loss estimate for Indymac. As I recommend with any bank, it's wise to stay under the FDIC limits. Please see my FDIC post for more info about what FDIC covers.

Indymac's rating at Bankrate.com has been dropping. It's now 1 out of 5 stars (lowest rated) based on 9/30/07 financial data (it was 2 stars on 6/30/07 data). Indymac Bank is a FDIC member (FDIC Certificate # 29730).

  Tags: savings account

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Comments
11 Comments.
Comment #1 by Jon (anonymous) posted on
Jon
According to the CSR, like their CDs, you must submit in writing that you want the account closed. So, you tell the CD to post to your e-money market account when it matures using their online interface, transfer the funds out (- $1000 to avoid fees), wait for the transferred-out funds to reach the destination account, submit in writing that you want the e-money market account closed, and hope that they don't lose the paperwork. I still wish there were a completely electronic way to transfer money out of indymac bank.

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Comment #2 by Chester Drawers (anonymous) posted on
Chester Drawers
People, we want IndyMac Bank to stay in trouble (big trouble) until the Fed Funds Rate begins its turnaround (hopefully next year?). If IndyMac Bank stays in trouble, they will do what Countrywide did and keep their rates competitive.

If IndyMac becomes stronger, they will lower their rates for sure, just like Countrywide.

So, it's a good thing that IndyMac only has 1 star. Just do what Banking Guy said and keep tabs on your FDIC level.

The FDIC will pay you very quickly should IndyMac fail. (Most likely though, IndyMac would be swallowed up by a larger entity rather than failing outright.)

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Comment #3 by rick (anonymous) posted on
rick
It's important to check the daily & monthly withdrawal limits if you're going to use this account to close your CD. Their Super Savings account withdrawals are limited to $5k a day and $25k a month, not sure about this account.

You can also have them (UPS) overnight a check for $10 or send it 2-day for $5.

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Comment #4 by Alex Moskalyuk (anonymous) posted on
Alex Moskalyuk
"Also, there's no interest if the rate falls below $1,000."

You mean balance?

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Comment #5 by Banking Guy (anonymous) posted on
Banking Guy
Yup, I meant balance. I just corrected that. Thanks for the note.

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Comment #6 by Unimpressed (anonymous) posted on
Unimpressed
I've opened several of these type of accounts online in the past few months - since interest rates started to plummet and one had to search around continuously for the 'best' ones available. I have to say that the account opening and funding procedures, plus the attempt to setup a login (all that I've experienced so far, no actual _banking_ yet) are the most clumsy, incompetent and non-confidence-inspiring that I have EVER seen! At no other online setup did I emerge without even an account number, nor was there no option to fund the account by AXCH transfer - although the useless email confirmation of the 'setup' suggested I had been offered such an option. I suggest giving this 'organisation' ('bank' seems an unsuitable name for it) a wide bearth. I intend to close my 'account' (if I even have one, that is) as soon as I can get their useless 'customer service' to understand English (CSR service seems outsourced to India - complete with current 20 min waiting period) and get them to actually understand why I want to do so ...

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Comment #7 by Anonymous posted on
Anonymous
E-Money Market down to 3.85% as of 5/28.

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Comment #8 by Anonymous posted on
Anonymous
If you have under 10k at IndyMac pull it out! Under 10k 1.35%!

Lucky I checked the tier!

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Comment #9 by MK (anonymous) posted on
MK
Indymac Bank is done guys. If you have any deposits, be sure to bring them under FDIC limits ASAP.

Here is the letter they sent to stakeholders.

http://biz.yahoo.com/bw/080707/20080707005985.html?.v=1

"In light of the current environment and related deterioration of our financial position since last quarter, we have been working closely with our federal banking regulators with respect to the actions that they and we must take to meet our mutual goal of keeping Indymac safe and sound through this crisis period. In that respect, based on information we have provided to our regulators, they have advised us that we are no longer “well capitalized”, which we stated on May 12 was a possible scenario. Our regulators have also asked us to submit to them a new business plan for their review and approval, something on which we have been working with them for some time. We have agreed on the basic elements of the plan, and the regulators have directed us to begin executing on it. An important element of our plan is to improve our capital ratios. Without an external capital raise, the traditional way to improve safety and soundness is to sell assets and shrink the balance sheet, which in normal times generally has the effect of improving capital ratios and bolstering liquidity. Yet in this environment, where either there are no bids for most of IMB’s mortgage loans and securities or the bid/ask spreads are abnormally wide, “fire-selling” assets would actually deplete capital further. As a result, the most realistic and cost-effective way to shrink both our balance sheet and our servicing rights asset (which, as discussed in previous communications, is up against the regulatory cap limit), is to curtail most new loan production."

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Comment #13 by Boby (anonymous) posted on
Boby
Hello. I find your blog very interesting. I think that everyone had something to do with banks. It is hard to choose a good and reliable one. After so many banks I had to deal with I should say that Indymac Bank is the best one. I learned about it from www.****edconsumer.com. Although the feedbacks about the company were not very positive I still ran a risk and went there.

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Comment #14 by Anonymous posted on
Anonymous
renee
tried to remove money from indy mac in june - informed the limit was 15K/da, & 25/ mo.(never told about this at deposit time!) - tried for a week on the web - the receiving bank was always suspended - called help & was always told that the site was corrected & was usuable. finally, after 8 long distance calls, was able to get a check which took a wk. to be delivered. yes I was a looser - now, don't know where a safe bank is - Switrzeland??

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