How’s Your Bank Doing?

October 31, 2008
Special Feature

Recently the financial headlines are full of big-name banks that have tripped over the credit crisis. Will your bank be next?

Recently the financial headlines are full of big-name banks that have tripped over the credit crisis. Will your bank be next?

The recently enacted bailout package boosted the FDIC insurance limits from $100,000 to $250,000. But if you have more than that in the bank, or if you’d like to avoid the hassle of having the FDIC take over your bank and limiting access to your money, there’s a way to find out just how safe your bank is.

At the Bankrate.com web site, click on the “Safe and Sound” feature. From there, you can research your bank’s star rating by bank name, by state, or by ZIP code. The ratings, which range from a low of 1 star to a high of 5 stars, quantify the bank’s relative strength and stability. Bankrate applies 22 different tests to measure the bank’s asset quality, profitability, and liquidity. The system also gauges whether the bank has adequate capital for its operations.

FDIC insurance is limited to $250,000 per depositor, per bank, per account. If you have more than $250,000 to put away, you can get around that ceiling by putting your money into different banks. You can also create more than one account at a single bank, but the rules governing how you do this are complex. For more information, visit www.fdic.gov.