Home
Articles
Indymac CD Holders Can Cash Out or Keep CDs

Indymac CD Holders Can Cash Out or Keep CDs

Author: Sam Cass on July 16, 2008 - modified on October 12, 2018

I just spoke to a woman from the FDIC regarding Indymac CDs and she told me that holders have several options. They can...

I just spoke to a woman from the FDIC regarding Indymac CDs and she told me that holders have several options. They will have six months to cash out the CDs with no penalty or they can keep them at the bank. If they keep them at the bank the FDIC will continue to pay the contract interest rate. But, if another bank comes in and buys Indymac, as I'm sure the FDIC hopes, the bank has the right to adjust the rate paid on the inherited CDs. In that case, the new bank will send a notice to all remaining CD holders. She said it wasn't clear if CD holders would have an opportunity to cash out their CD penalty free at that point.

Sam Cass: Sam Cass, MBA, JD, University of Texas at Austin. Always a fan of Leonardo Da Vinci.

Today's Highest Online CD Rates

Bank	Product Term	Interest Rate (APY)
TotalDirect, a division of City National Bank of Florida	1-Year	4.50% APY with $25,000 minimum
Canadian Imperial Bank USA	1-Year	4.43% APY with $1,000 minimum
First Internet Bank of Indiana	1-Year	4.42% APY with $1,000 minimum
Navy Federal Credit Union	3-Year	4.05% APY with $100,000 minimum
Merrick Bank	3-Year	4.00% APY with $25,000 minimum
Colorado Federal Savings Bank	3-Year	3.95% APY with $5,000 minimum
Synchrony Bank	5-Year	4.00% APY with no minimum
Merrick Bank	5-Year	3.95% APY with $25,000 minimum
M.Y. Safra Bank	5-Year	3.90% APY with $500 minimum

See More Online CD Rates →

Comments

JRodgers

July 16, 2008

Thank you for posting this, Sam. I think it should be of strong interest to many users of this site.

Is this review helpful? Yes:0 / No: 0
tightwad

July 16, 2008

Why cash out? With the Feds taking control it is now probably the safest bank in the country.

If a new bank takes control and changes terms, You should be able to cash out than.

Although people over the FDIC limits may lose money, this may be a good thing in the long run because it will educate people to the things blogs like this have been trying to warn people about; staying under the limit...Plus, if enough people lose money it may be the nudge needed to finally increase the amount of deposit insurance per person. 100K is outdated and too low!

Is this review helpful? Yes:0 / No: 0
Sam Cass

July 17, 2008

@tightwad: The only reason to cash out is if you think Indymac's deposit assets will be purchased and the rate reset significantly lower. The FDIC told me this could happen.

Is this review helpful? Yes:0 / No: 0
Joe Smith

July 21, 2008

Thanks for providing this information.

Is this review helpful? Yes:0 / No: 0
Suzi

July 23, 2008

If a new bank takes over, wouldn't it be good business to keep rates as is, thereby keeping customers happy and continual? Besides, try getting through to the bank by phone to cash or roll over, not possible.

Is this review helpful? Yes:0 / No: 0
Sam Cass

July 23, 2008

"If a new bank takes over, wouldn't it be good business to keep rates as is, thereby keeping customers happy and continual?"

Yes, that would make sense. But it doesn't seem like the acquiring bank would be required to keep rates as is. That's just what I wanted to people to know.

Is this review helpful? Yes:0 / No: 0