Dedicated to Deposits: Deals, Data, and Discussion

FDIC Finally Closes Sale of IndyMac, It's Now OneWest Bank (2.65% 9-Month CD)

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OneWest Bank N.A. (Pasadena, CA)
The FDIC announced late yesterday that it had completed the sale of IndyMac to OneWest Bank, FSB, a newly formed Pasadena, California-based federal savings bank organized by IMB HoldCo LLC. Here's an excerpt from the FDIC press release:
OneWest will assume all deposits of IndyMac Federal. IMB HoldCo signed a letter of intent with the FDIC on December 31, 2008, to purchase IndyMac Federal.

The 33 branches of IndyMac Federal will reopen as branches of OneWest tomorrow. Depositors of IndyMac Federal will automatically become depositors of OneWest. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage

This LA Times article has more details on the business side of this deal.

For the customer side of this change, OneWest has a FAQ on this IndyMac page. For those who have existing accounts at IndyMac, the FAQ states that "no changes are being made at this time. If any changes are made, they will be communicated to you." For those with CDs at IndyMac:
With respect to CDs opened after July 11, 2008, customary early withdrawal penalties apply. With respect to CDs opened on or prior to July 11, 2008, you are permitted to withdraw, without penalty for early withdrawal, all or any portion of your CDs.

For those who opened CDs before IndyMac's closure, you don't have to worry about penalties if you need the money. However, I'm sure few people will want to close their CDs since many of those CDs will likely have much higher rates than exist today. The only thing you'll have to worry about is if OneWest decides to terminate those CD contracts. Based on the FAQs, it may decide to do so in the future.

In another FAQ, OneWest says it plans to continue to offer CD and savings account rates which are competitive with the marketplace. The FDIC did a fair job at maintaining competitive rates while it managed IndyMac after the July failure. The rates were most competitive in the couple of months that followed July. In the last few months, rates have been okay, but they haven't been near the leaders.

2.65% 9-Month Online Certificate of Deposit

Perhaps we'll see some special rates to promote the new OneWest Bank. I just noticed a very competitive 9-month CD with a 2.65% APY. It's listed at IndyMac's CD rate table as of 3/20/09. All the other CD rates are disappointing including the special 1-year CD (only 2% APY). These are available only online. Minimum deposit is $5,000.

The E-Money Market continues to be fairly competitive with a 2.25% APY on balances of at least $1,000 as of 3/20/09.

I have more details on IndyMac's CDs and E-Money Market Account in this 2008 post which includes my experience when I opened an IndyMac CD. I don't know how much has changed since then. I hope OneWest stays committed to offering an internet bank with not only competitive rates but strong internet features that make it easy to open and manage online accounts.

Depositors Who Lost Money

When IndyMac was closed last July, depositors lost half of their deposits over the FDIC-insured limits. Unfortunately, the closure happened before the new temporary $250K limits were in place. The IndyMac Depositors blog describes several cases in which mistakes by IndyMac Bank staff appeared to have costed depositors thousands of dollars. As I described in my post on extending FDIC coverage, you have to very careful. The FDIC has many rules which can invalidate the additional coverage. There have been some rule changes which should reduce problems in the future (see post), but there are still issues. And if you're wondering about the temporary $250K limit and the status of this being made permanent, please refer to my March 6th post.
  Tags: OneWest Bank N.A. (Pasadena, CA), CD rates

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Comments
5 comments.
Comment #1 by Anonymous posted on
Anonymous
That 2.65% 9-month CD requires you to have their premium checking account which pays "up to" 1% for amounts over $25,000. Without the checking account, the 9-month CD pays 2.25%

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Comment #2 by Banking Guy (anonymous) posted on
Banking Guy
Thanks. OneWest is not starting off right with well documented specials. Did you find these details on their website or via a CSR? I used their online chat tool, and the CSR wasn't aware of these requirements.

1
Comment #3 by Anonymous posted on
Anonymous
This was from an ad in today's (3/20) LA Times (page A17). The ad was for the Premium Checking account, and as a sidebar they showed a 9-month CD at 2.65% APY with Premium Checking, minimum $1,000 to open -- then in really tiny type "2.25% APY for CD only."

1
Comment #4 by Banking Guy (anonymous) posted on
Banking Guy
Thanks. That may be for their branch CD. I see the 2.25% APY is listed for their standard branch 9-month CD.

1
Comment #5 by Anonymous posted on
Anonymous
What happens to my certificate issued by the fdic for the overage when indy mac went belly .
fdic said it would be paid at a later date . is this that later date????

1