My Experience Renewing a CD at IndyMac Federal Bank

IndyMac has fantastic customer service, and my experience with them shows that it is well worthwhile to open CDs in this low interest rate environment.

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.

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to financial literacy and bank transparency. Since co-founding this website in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

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Comments

  • tightwad

    August 28, 2008

    Too bad you didn't ask for them to match WaMu's 5% 12 month CD. They would have done it and you would have made an extra $400+ dollars.

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