My Experience Renewing a CD at IndyMac Federal Bank

I opened a CD with IndyMac Bank about nine months ago.

I had some concerns about the bank's liquidity so, while the rate was already fantastic, I was careful to only deposit an amount which I calculated would be worth just under $100,000 on maturity today. In the middle of July, when IndyMac was seized by Federal regulators one Friday afternoon, I watched with comfort as CNN showed people lined up to try to recover their deposits, knowing that I was safe for keeping the balance under FDIC limits.

I received a notice of renewal earlier in the month, and called today on maturity to discuss my options. The phone was answered in a second and the fellow with whom I spoke was amazingly helpful when I asked what my options were. Since the bank is now owned and operated by the FDIC, I asked straight out whether I would be protected if I simply renewed the entire instrument and allowed the balance to accrue over $100,000. He responded that it is a safe bank now that it is owned by the FDIC , but that they still recommend that all deposits be within FDIC insured guidelines. He recommended that I could easily convert the account to a joint account. Instead, however, I decided to reduce the balance and renew the CD intro a one year instrument paying 4.25% so that when the CD matures one year from today, the outstanding balance would be just under $100,000 (the actual amount renewed came to just under $95,800).

All in all, it was about a three minute experience. As a result of this experience, I am not only very comfortable working with IndyMac, but would also be confortable depositing money with other banks that may now be in distress so long as I keep the balance below the $100,000 FDIC insurance limits.