Update on IndyMac Failure & Me

[gawguy]

If you did not read my other post, I was a customer at IndyMac with a bit over $100,000 on deposit. Interest had sneaked the balance over the stated insured limit. My CD was to mature on July 15, and the bank was taken over on July 13. Damn!

 

1) First thought was everything over 100k was toast.

2) Then I saw that usually one half of the unisured amount is automatically paid by FDIC.

3) Then I talked to an IndyMac phone rep who told me that since the amount over 100K was all interest, it was all covered. Huh!? What! Wow!

4) Then I looked on the internet at the FDIC site and other places and they all said nothing over 100k is covered, and they mentioned accumulated interest specifically.

5) On July 28 IndyMac cut and mailed a check to me for the full amount of deposit and accumulated interest, about $101,500. Nice...but go figure?

 

Can anyone shed light on this? A woman who took in the check at Wachovia said, "They (IndyMac) had enough money." How does this work?

[Neo]

Why choose a CD that bears just 1.5%?

 

[gawguy]

Why choose a CD that bears just 1.5%?

 

I didn't. The rate was something like 5.5% for a term of one year. I put in around 97K or so. I don't remember exactly. As I said, the accumulated interest pushed just over the definitely insured 100K. I will calculate the interest more exactly in the future in order to stay all-insured.

[cavanami]

Take the monmey and run!

[gene1944]

Wachovia is your next bank?

 

Isn't that sort of like getting out of the frying pan and into the fire?? Read some financial news reports on Wachovia.

 

You might become an expert on dealing with FDIC insurance as you might be going thru this again.

[gawguy]

Wachovia is your next bank?

 

Isn't that sort of like getting out of the frying pan and into the fire?? Read some financial news reports on Wachovia.

 

You might become an expert on dealing with FDIC insurance as you might be going thru this again.

 

Yes...well, I already had a minimal acct w/ Wachovia branch nearby, so I could hand-carry my IndyM check in. It's Money Market so I will reduce my balance below 100k just as soon as they take the hold off the funds. Wachovia should hold up for a couple of days. :smirk:

 

I did actually raise my concern about bank failures with lady who set up my money market acct and I mentioned the recent Wachovia bad press. She said, "We're 4 times bigger than IndyM." That would surprise me if it's true - I would have thought they were 10's of times bigger. Too lazy to look now. You wanna look?

 

Regarding FDIC: It was seamless. I didn't have to deal with them. When they took over IndyM, it became IndyM Federal Bank. Same phone numbers, procedures, etc. They paid me interest until the day they cut my check. They were still soliciting accounts too. They offered me a 4% CD for however much I might want to leave with them which was nothing because I have plans for the money. But I also have an IRA with them and I'm not moving it.

 

As long as all your funds are insured, no problem except for a little delay in getting funds because after FDIC takeover there's a bit of restructuring and a lot of liquidation. FDIC is backed by "The full faith and credit of the United States Govt," which means "As long as we got paper and ink, we can just make up some money for you... What!? You want Euro's! You can't have Euro's!"

[gene1944]

Glad to hear that something in the government is working anyway and that it all worked out well for you.