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More News on IndyMac and Its Current CDs

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This Bankrate article has an interview with FDIC spokesman David Barr with some interesting experiences of the closure and some useful details about how those with over the FDIC limits will be compensated. He described some irrational behavior of people who knew about the protection of the FDIC, but still came to get their money. Here's one example he described:
One couple flew in to stand in line to get their money and flew home. I couldn't imagine what an airline ticket with two days' notice to Los Angeles cost.

The spokesman goes into detail to describe how those with uninsured deposits may be paid after the intial 50%. At the start of his answer he describes the current FDIC plans for IndyMac:
We're looking at about 90 days to sell the bank to another bank or banks, depending on how the bids come in, so we're looking at mid- to late October.

The spokesman also explained how the FDIC was handling the issues of other banks not honoring IndyMac cashiers checks and what's going to happen to HELOCs and loans.

Update 7/29/08: Here's an interesting NY Times article describing the events at IndyMac before the closure.

IndyMac Federal Bank Still Offering Competitive CD Rates

Since it appears that IndyMac will be sold in the next few months, I was wondering what impact this would be for those who open IndyMac's current CDs. The new FDIC IndyMac (IndyMac Federal Bank) is still offering some very competitive CD rates including a 4.15% APY 9-month CD. This is actually 10 basis points higher than what was offered on the first Monday after the closure. Perhaps the FDIC is trying not to lose too many deposits to help the future sale.

I just did a chat session with the IndyMac CSR, and I asked what would happen to the CD if IndyMac is sold to another bank during this time. According to the CSR, the CD would remain the same. Update 7/29/08: Based on a reader's comment, I called for confirmation on this issue. The CSR this morning said that the new bank could choose to close the CD. Note, the number listed at the website (800-750-8521) doesn't seem to work. I was able to get through using the one that the CSR in the chat session provided (800-998-2900).

According to the CSR, the online CD opening process is the same as it was before the closure. Please refer to my April IndyMac post for more details about the CDs and my experience opening and closing an IndyMac CD.

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

IndyMac and FDIC Links

Here's my IndyMac page with all of my recent IndyMac closure posts.

For details and issues regarding using trusts to extend FDIC coverage, please refer to this post. I just updated this post with a recent commenter's experience in trying to get back his IndyMac funds that were over $100K but were insured via revocable trusts.

Please see my Facts about FDIC and NCUA post for more general info and references.

  Tags: CD rates

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