Posted on 09/29/2008 5:28:29 PM PDT by Farmerbob
What should be done with bank savings and CDs?
I noticed that WAMU’s CD rates were almost as high as the rates at the internet bank we use - right before they went under.
You might want to call around, look for a credit union or even a regional bank in your area, see what rates they offer.
Savings and CD’s are covered by FDIC up to $100,000. presently.
Be careful of interest accruing that will put you over the $100,000 limit. $95,000 in any one C/D s/b the limit.
I wonder why, if there is a credit crunch, banks aren’t giving a higher rate to people with money to lend?
There are a lot of stupid bets (not investments) that some on Wall Street made that are biting them in the gut.
Definitely take to time to check your bank’s rating and be aware also that the FDIC coverage on accounts is per account holder. So, if you have several different accounts, the total amount in all the accounts needs to be under $100K to be covered. As a banker, I can tell you that the smaller community banks and credit unions do tend to be much more conservative in tehir lending, so are far less likely to have riskier loans in their portfolios.
That question is the exact reason that I gave you the advice that I did. I believe the rates that have been offered by the Fed have resulted in less need for deposits. Why pay more for CD's when they can borrow from the Fed & get a higher rate of profit?
If you are concerned about the liquidity of your bank, there are ways to check that out.
The FDIC doesn't keep a public list of banks that may be in trouble. And if you think about it, this makes sense, since a list would soon become self-fulfilling as there would be runs on the "bad" banks.
But there are bank rating services. There is a page at the FDIC website that gives a basic rundown of the private services that rate financial institutions.
Here it is. Some are fee-based, some are not. Obviously, start with the free ones. I have never felt the need to move beyond the free services. The FDIC doesn't endorse these, but they are a potential starting place if it is of concern.
Bank Rating Services *pops*
/YMMV, IANAL, etc.,
Convert them into silver coin.
There is very little money to lend, and the interest rate to those with great credit is high at this time. The banks have a liquidity problem....there is very little money to loan. Why? Because of what they must keep in Reserve, for loans already made. And because they cannot sell the loans on their books to investers, which is why the Bailout was to buy those mortgage loans...giving banks liquidity to loan. Credit is now at a standstill except for very few.
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