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Indymac Bank Continues to Offer 5.70% 6-Month CD


I don't know how much longer this will last, but as of 9:00am EDT, Indymac Bank still lists 5.70% APY on its 5 and 6 month Internet Customer Term CDs. Their special Internet 4 Month CD yield has already fallen from 5.75% APY to 5.00% APY. So these 5 and 6 month CDs may be your last chance to lock in on a decent rate. They also have a 1-year CD with a yield of 5.45% APY. The minimum deposit is $5,000. The nice thing about these CDs is that you can apply online and fund them using ACH transfer from a checking account.

More information on their CDs is available in their terms and conditions document. The early withdrawal penalty for the certificate of deposit for terms under one year is 1 month of interest. For terms of one and less than two years, the penalty is 3 months of interest. For terms of two years and over, the penalty is 6 months of interest. There is a seven-day grace period, which begins the day following the maturity date, when funds can be transferred to another account or withdrawn.

For customer service questions, you can use their online chat system which worked well for me. Here is some of the infomation I received:
  • CD can be funded by mail, wire transfer, or electronic funds transfer (EFT) via ACH from a checking account at another bank.
  • If you fund by check, the rate is locked for 12-days from the date you open the account.
  • The online application can be done completely online with nothing to print out.
  • Beneficiaries would be listed as an In Trust For (ITF) in the account title so it can be used to extend your FDIC coverage over $100k. Unlimited number of beneficiaries can be listed in the online application. You only need their birth date and not their SSN.
  • At CD maturity, the EFT cannot be reversed. If you set up a checking or savings account with them, you can instruct them to transfer into that account. Also you can request them to mail a check or wire transfer out the funds ($30 fee)
  • After the online application, Indymac will email you a confirmation. Signature card and account disclosures will be sent my mail in 7 to 10 business days.
  • No hard credit inquiry is done - only ChexSystem

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).

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Ade (anonymous)   |     |   Comment #1
Thanks so much for your quick alert to the rapidly dropping rates AND Hindymacbank still offering 5.70%! I hastened to open by phone an IRA account, and was told I can add to it at the sam rate when my other IRA matures in a month. Too bad it's for only 6 months as I have a hunch the rates will continue down thogh I'm far from expert! :o) Great job! Thanks again!!! Adela
P.S. Now, if I found a good triple tax free investment for my non-IRAs... ;o)
djc314 (anonymous)   |     |   Comment #2
I checked out this bank on bauer financial.com another cite that grades banks and they gave indy a 3.5 stars which is good...also I am a bit confused on your note on what happens at expiration date of cd's...is there a automatic renewal after a certain amount of days? and if you want the money just sent to you by check they charge you? or can you have the money electronically transfered to your bank of choice? or do you have to open a indy money market account and then have the cd moved to your mm account and then close the mm account?
Anonymous   |     |   Comment #3

I believe if you want a check, they will mail it free.

If you want it wired, you will be charged 30 dollars.

They will not reverse the electronic funds transfer(EFT) after maturity, meaning they will not EFT you money anywhere from the CD account. If you have a seperate checking/savings account with them, and ask that it is deposited in that, you can than do the EFT to your bank.

As far as an automatic renewal after the seven day grace period...Probably, at their lowest rate available ;o), so you should keep track and give them your directions when/before it matures.
Banking Guy
Banking Guy (anonymous)   |     |   Comment #4
Anonymous, thanks for providing the explanations. Having a money market, savings or checking account with them would provide the easiest and cheapest way to close the CD and transfer the money.

Keeping that liquid account open would make it easy for future CD specials. The minimums and rates are reasonable.
Dalosony (anonymous)   |     |   Comment #5
Their special Internet 4 Month CD yield went back up to 5.75% APY from 5.00% APY.
Dalosony (anonymous)   |     |   Comment #6
No more 5.70% 6-Month CD as it's now 5.40% APY.

Their special Internet 4 Month CD yield dropped to 5.40% APY from 5.75% APY.
Ade (anonymous)   |     |   Comment #7
Hello djc314, and you have good questions. I'm sorry I didn't comeback to see your and the others' comments. I'm usually good at asking questions before opening an acct. but I think I must've forgotten in my hurry to catch this good rate, as I may have forgotten about fees too... I'll ask tonight when the person dealing with me starts work, and will post it here. I refer to an IRA account though. But I just received the transfer papers which made me very angry - it says that there's $15 annual fee, and $25 transfer fee, or, $25 termination fee...unless I have over $10,000 (so one has to pay a fee n o matter what! I asked whether the fees will be waived when I add to this acct. the $30,000 maturing in Oct. and was told NO. Thanks to your thoughtful questions, I'll ask the rep when I call tonight and will post here. A few weeks ago I called the IRS whether, in order to avoid receiving 1099s, I had to change the money from one institution to another in any certain way. And was told that just any transfer it's ok but not a rollover (getting the check even if depositing within 60 days). The IRS added corporations don't have to send 1099s when transferring from inst. to inst. but they do. How do you like that? I mention this, because if one gets the check of our matured money and THEN put into another...we're slapped with the 1099. So I wonder whether if putting it into a MM or savings and THEN taking it out...we may save the $25 transfer fee but...will be slapped with a 1099??? I'm making a list of all the questions to ask tonight...

Hi anonymous: The little I learned about these things is that, yes, they'll send you a check for free but most (not all though) charge for a transfer. I heard there's a transfer that's free - the ACH? Or it costs only $10, not sure. Anyone knows? You say: "If you have a seperate checking/savings account with them, and ask that it is deposited in that, you can than do the EFT to your bank." As mentioned, it's ok but they'll send you a 1099...As to automatic renewal after the grace period, I'm sure they'll roll it over again and at a low rate too so, of course, one has to be on top of this all the time! What I usually do in these cases, I have them transfer (hopefully for free) to an account I have at The Vanguard Group. Their rates aren't bad and I use them as "parking lot" (thought they wouldn't like it but never said anything!). Then you can transfer to the institution you want as they don't charge for it. I put my IRAs in their Prime Money Market for around 5% these days, and my regular money in a NY tax free money market until I decide how to use it. I hope this helps some people? About 4 months ago I took advantage of Everbank.com 6.01% for 3 months MM and at the end they reduced it to only 5% which isn't bad. They're still offering that great rate...for NEWCOMERS only though.

Sorry for the lengthy message and good luck to us. :o) Adela