IndyMac Bank 5.40% 4-Month CD Rate

Indymac Bank is running a Internet special for their 5.40% APY 4-month CD account. The account is an Internet-only deal, and requires a $5000 minimum deposit to open.

Indymac Bank is currently the leader for short-term CD rates according our CD rate tracker.

Many readers have been emailing me asking me for advice on what to do regarding the latest interest rate dips. The Federal Reserve cut interest rates by 0.50%, forcing many banks to cut their rates as well. Right now, it is uncertain whether the Fed will continue to drop rates at their next meeting on October 30, 2007. According to Money-Rates, there is a 60% chance that rates will continue to be cut, and 0% chance that rates will be increased.

Since it is more likely than not that rates will continue to fall, a safe play would be to start locking in rates by laddering CD accounts.

Suppose you have $100,000 in cash and you want to lock in the current rates to hedge against future cuts. You would divvy up that cash into chunks and open CD accounts with staggered maturity dates. Ie, $10k in a 4-mo CD, $10k in a 5-mo CD, $10k in a 1-yr CD, and so on. This way you don’t risk tying up all of your funds all at once, but still lock in favorable rates. Click here to learn more about Indymac Bank’s 5.40% APY 4-month CD.