Dedicated to Deposits: Deals, Data, and Discussion

High CD Rates Are Not Over at Indymac

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Indymac Bank is back up and running this morning as Indymac Federal Bank, and it's now being operated by the FDIC. I was able to log into my account this morning without any problems and without any changes to my account. I still have a small amount in a savings account that I opened earlier this year to make closing a CD easier.

What's interesting is that they're still offering some high CD and savings account rates. The two competitive CDs include a 4.05% APY 9-month CD and a 4.15% APY 12-month CD. However, all the other terms had rate drops. Rates for most terms now have yields under 4%. There was even a slight improvement to the E-Money Market account since Friday. The best change is that it now has a decent yield of 3.10% APY on balances under $10K. Below is a list of all the new rates and how they have changed since Friday.

Indymac rates as of 7/14/08:

CD Term APY Change
3-month 3.25% -0.05
6-month 3.65% -0.10
9-month 4.05%
10-month 3.05% -1.00
12-month 4.15%
13-month 3.80% -0.35
18-month 3.90% -0.50
24-month 3.80% -0.85
36-month 3.95% -0.50

E-Money Market

Tier APY Change
under $10K 3.10% +1.75
$10K - $25K 3.30% +0.20
$25K - $50K 3.65% +0.35
$50K - $75K 3.70% +0.05
over $75K 3.70%

It appears these accounts have the same features as before. Please refer to my April Indymac post for more details about the CDs and my experience opening and closing an Indymac CD.

For those who already have Indymac CDs, it appears that the CDs will continue with the same interest rate (see Q&A), but you may have a choice to close the CD early without a penalty (see Q&A).

In the FDIC press release, the FDIC said it plans to operate the bank to "to maximize the value of the institution for a future sale". So a sale should be something to expect down the road.

Deposits at this new Indymac Federal Bank are FDIC insured (see Q&A).

To review more details about the Indymac closure, please refer to my Friday post. I also posted on a press release from the FDIC chairwoman in this Sunday post.

Update: Calculated Risk has an informative post on Indymac and other potential bank failures. An interesting note is that Indymac had $18 billion of insured deposits by 200,000 customers. That comes out to an average $90,000 per customer.
  Tags: CD rates, savings account

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Comments
15 comments.
Comment #1 by Anonymous posted on
Anonymous
Does anyone know if they are still using the same ACH number? I searched the FDIC database and found the entry for the old "IndyMac", but no entry for the new "IndyMac Federal". This is important since I need to do an ACH pull if I want to get my money out of my IndyMac online account. Thanks.

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Comment #2 by Anonymous posted on
Anonymous
So it safe to leave a newly opened CD there? Or should I use this chance to go ahead and move my money out to a safer place? The interest rate is good, but I don't know what the risks (if any) are keeping it there... My CD is below the FDIC insured amount, so no worries there.

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Comment #3 by Anonymous posted on
Anonymous
Now that IMB has been taken over by the FDIC, it's probably one of the SAFEST places you could have your money in the entire banking industry.

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Comment #4 by Anonymous posted on
Anonymous
What's the rush to pull your money out at this point? If you were concerned about risk, you should have pulled it out weeks and months ago when the red flags were being raised all over the place. As long as you remain under the $100k FDIC limit, you've got nothing to wrry about. IMB isn't going to fail again anytime soon.

1
Comment #5 by Anonymous posted on
Anonymous
IMB is THE SAFEST bank in the nation right now, as long as you stay within FDIC limits.

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Comment #6 by O-Qua Tangin Wann (anonymous) posted on
O-Qua Tangin Wann
If IndyMac had a rate higher than others, I would absolutely transfer my money and feel safe.

The FDIC is covering all insured deposits...and once the bank is sold, the new bank will cover your money, with the FDIC backing them.

Just be careful. If you are over $100K as a solo holder, make sure you add at least two qualifying beneficiaries and make sure your account title reflects that your account is POD or ITF, etc.

If IndyMac refuses to do the titling, keep your money under $100K.

~O-Qua Tangin Wann

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Comment #7 by Anonymous posted on
Anonymous
I was LMAO earlier this morning listening to news reports about IMB depositors lining up to remove their money. The depth of insanity and idiocy in our country is not probeable. As others already have posted, IMB is today the safest bank in the United States of America. Only question I would have, and it's just a matter of curiosity, concerns safety of deposits (from today forward, only) which exceed FDIC limits. It's difficult for me to believe the FDIC, now as administrator of the bank, would renege on any deposits whatsoever, regardless of amount. Of course, should a buyer be found for IMB, things would revert instantaneously to normal vis a vis limits. Bottom line though, as of today, folks who went into IMB in the past within FDIC limits are in hog heaven! Were that not the case, nobody would be worrying about IMB; we'd all be kissing the COUNTRY goodbye!!

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Comment #8 by Anonymous posted on
Anonymous
Why should it surprise you 11:12? Posters on this blog can't even seem to "get it" and seem to ask the same questions again and again. Does antone even bother reading banking guys and others explanations and posts?

How many people have to ask if they should close their accounts and where should they put their money? Geez people, take a minute and read the blog....

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Comment #10 by Sofa King Frustrated (anonymous) posted on
Sofa King Frustrated
It is possible that many of the people lining up at IndyMac today are those that were over the $100,000 limit. Those people can get 1/2 of their money now that was over the limit, and of course they would want to take that money out today.

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Comment #11 by Anonymous posted on
Anonymous
I am not worried about my money now, but when the FDIC does find a buyer I am sure the money market rate is going to drop dramatically (like BoA taking over Countrywide). Guess I will wait until that happens before I pull my money out.

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Comment #12 by Anonymous posted on
Anonymous
Also depending upon who buys them up, one might very well have a FDIC limit problem if they have considerable $$$ with the buyer. I know I have about 15 of these money market accounts due to the low FDIC limit.

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Comment #13 by Anonymous posted on
Anonymous
Ignoring the post above mine...

I happened to be at an Indymac branch last Thursday. Many of the people waiting had more than $100,000 on deposit. Some were retitling their accounts to add various heirs and some were pulling the excess out. There was one person who was worried about what exactly the insurance meant.

I actually could see into the office and on a white board someone had written that they had a retention of 80+% for a recent time frame, either the week or day (can't remember exactly).

I was only there because I had a matured CD. I was anticipating closing it, but when I saw the rate sheet on the CSR's desk I changed the term to a 12-mo and got a 4.45 apy. When I moaned a bit about the low rate on another recently matured CD, the CSR upped the rate to 4.45 even though the renewal period had passed. DO YA THINK SHE KNEW WHAT WAS COMING the next day?

I can log into my account and the two renewals are showing at the 4.45 apy rate. I'll let them sit until I'm told they can't stay at that rate.

I wonder what will happen when my other CDs mature, will FDIC roll them over at current rates or expect me to close them..
I guess time will tell.

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Comment #14 by Anonymous posted on
Anonymous
It has been 10 days since I opened a CD by phone and mailed a check to Indymac Federal Bank. The check has not been cashed and the account has not been opened. Am I the only one having this experience?

1
Comment #15 by Anonymous posted on
Anonymous
Anyone know if they still charge a fee to mail a check after redeeming a CD? I have a cd opened prior to the shutdown. would like to pull it for a WM cd but not if they hit me for $25.

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