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Thread: how 2 'check' bank..

  1. #1
    God/dess whirlerz's Avatar
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    Default how 2 'check' bank..

    that is, check an online one, for safety. Or, does it being FDIC means it's ok? I want to do a MMA


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    Banned Katrine's Avatar
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    Default Re: how 2 'check' bank..

    What is the bank?

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
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    Banned Melonie's Avatar
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    Default Re: how 2 'check' bank..

    first question is the nature of the money market account ... some are FDIC insured while others are not. Basically, if the MMA IS FDIC insured, the US taxpayer is guaranteeing that you'll get all of your principal back in the event the bank goes belly-up.

    While it's not generally publicized, the interest rates that particular banks are paying on savings accounts / CD's / Money Market accounts are now inversely proportional to the financial 'safety' of the bank. The reason for this of course is that all banks need 'cash' but troubled banks need 'cash' much worse than non-troubled banks ... thus they're willing to pay higher interest rates in order to attract new depositors who would otherwise seek out non-troubled banks instead.

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    God/dess whirlerz's Avatar
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    Default Re: how 2 'check' bank..

    Ah.^
    thanks, Mel.
    Kat, I'm not sure yet. Been checking online w/bankrate.com for a mma. I'm trying to get the highest rate, w/o a huge required deposit, monthly balance requirement or other fees. I also look at the ratings they have listed on bankrate, they are rated up to 4 stars, that being the highest. Some aren't rated, however. The last one I looked up was located in St Louis, Mo but I can't recall the name.


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    Default Re: how 2 'check' bank..

    Melonie: doesn't being an FDIC member only insure you up to $100K? That's what I thought, maybe I was mis-informed.. Oh well, I don't have a bajillion dollars to insure so I guess it doesn't matter for me.

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    Banned Melonie's Avatar
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    Default Re: how 2 'check' bank..

    Yes the FDIC is limited to $100,000 per account. There is some argument as to whether this really means $100,000 per social security number period, $100,000 per social security number per financial institution, or $100,000 per account number - this has never really been tested since American banks have never had enough consecutive failures before that the FDIC / FED couldn't arrange a willing buyer thus avoiding the necessity of making insurance payouts. It also brings into question whether TIN based accounts opened by illegal aliens at Bank of America are really entitled to FDIC insurance or not !

    Also, FDIC insurance only covers the principal ... not the interest. Thus if someone has $50,000 in an account when a bank goes bankrupt, if that bank can't be sold the FDIC will eventually cut the depositor a check for $50,000. There is no time limit as to how quickly or how slowly that may happen. Keep in mind that the FDIC actually only has the cash reserves to cover checks on something well below 1% of total FDIC insured accounts. Thus if 2-5% of US banks wind up failing in a future catastrophic situation, it could take many years for the FDIC to finally collect enough additional fees from healty banks to pay off the account holders at the failed banks.

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    Default Re: how 2 'check' bank..

    Quote Originally Posted by whirlerz View Post
    Ah.^
    thanks, Mel.
    Kat, I'm not sure yet. Been checking online w/bankrate.com for a mma. I'm trying to get the highest rate, w/o a huge required deposit, monthly balance requirement or other fees. I also look at the ratings they have listed on bankrate, they are rated up to 4 stars, that being the highest. Some aren't rated, however. The last one I looked up was located in St Louis, Mo but I can't recall the name.
    ING Direct is pretty good and stable

  8. #8
    OdysseusNJ
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    Default Re: how 2 'check' bank..

    If it's FDIC insured and your balance is sub 100,000 I would just go with the one with the best rate, after a cursory google check to make sure it isn't an utter scam and they have a decent online interface. I've switched between ING Direct, E-Loan, Countrywide, and one other whose name I can't remember as rates shifted. They were all pretty much the same servicewise, which is to say decent and easy to use, and all were within 4-6% yield.

    Heh, Mel is right. Countrywide's rates are *great* right now.

    I think GMAC may not be FDIC insured. I could be wrong on that. I remember not liking them for some reason beyond worrying that Gen Mot would tank.

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    Banned Melonie's Avatar
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    Default Re: how 2 'check' bank..

    ^^^ yeah, FDIC insurance is an absolute must if you're going to mess around with known problem banks like Countrywide, WaMu, E-loan / E-trade etc. Of course the question of 'moral hazard' i.e. the US taxpayer being forced to provide a backstop for bandits like Countrywide's Angelo Mozilo, so that people are encouraged to hand the guy even MORE money to speculate with, is a whole 'nuther subject !

    Whatever happened to the Glass-Steagall Act anyhow ? America went down this exact same financial path 70 years ago ... and today's journey increasingly appears to be headed for the exact same destination !!!

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