Last month in my post Ignore My Financial Advice, I said:
6- Only Bank with the Best.
Unless you’ve avoided the news for the past few months, then you are aware there are some banking shenanigans going on. Some banks have lots of toxic loans on their books. Banks can and will fail. Even though accounts are FDIC insured up to $100,000, I’d prefer not to go through the hassle. I saw how our government handled the Katrina disaster, so you’ll understand why I’d prefer to keep my money in better banks. Keeping a thousand in cash might not be a bad idea should the ATM card for your failed bank stop working.
BankRate.com provides Safe and Sound ratings for all banks. Another clue that your bank may be in trouble is the offering of higher than normal rates on CDs or deals with sovereign wealth funds. Good banks don’t need lifeline loans.
This morning my CD with IndyMac bank matured. IndyMac has the lowest rating a bank can receive with Safe and Sound ratings. After seeing Bear Stearns implode in days, I didn’t need much encouragement to close that account out immediately.
This weekend I met a friend of a man who had money in a bank that went under. His account was FDIC insured. It took the government two years to get his money back.