Indy-Mac bank failure?

Question

Will those with fixed term CD's be able to cash them in without penalty now? If there is a loss of two days interest, it seems the bank broke its contract.

Answer 1

The FDIC seized the bank on F 07-11-2008 (eve) after the market was closed and everyone was home.

The FDIC has ONLY $53 billion insurance fund. That's a heck of a lot less capital than I thought.

The FDIC estimates they will have to shell out "between $4 billion and $8 billion" to make qualifying depositors whole.

http://www.reuters.com/article/gc06/idUS...

There is about 4% of Indymac depositors that will not be eligible for FDIC insurance.

I wrote a post last week BEFORE Indymac was taken over.

http://answers.yahoo.com/question/index;...

As for the "bank breaking the CD agreement." Forget about suing, shareholder equity will be wiped out.

Answer 2

CD"s are FDIC insured and now they are not liquid, but will be redeemed by the bank or FDIC in the next two weeks. no one will lose money up to the FDIC limits, which vary by account type.

Answer 3

They will be cashable IF they are covered by Deposit insurance

But I don't think they are

Check with the bank or Receiver.