Is your bank safe?

by Manshu on October 29, 2008

in Articles

There are a large number of banks and credit unions in the United States, and while it is easy to track the bigger banks, it becomes really difficult to keep tab of the health and soundness of the smaller banks.

A few weeks ago, some friends queued up outside National City bank, as there were rumors that the bank will go bust. And last week the bank was taken over by a bigger financial institution. Had it not been for the bailout plan, the bank would have most probably been left stranded.

In such times, BankRate.com’s Bank and Credit Union rater can be quite a handy tool. This tool lets you look at the health and financial soundness of your bank and credit union.

You can search for your bank from the dropdowns and then look at how many stars it has. This is how it works:

  • 5 stars: Superior
  • 4 stars: Sound
  • 3 stars: Performing
  • 2 stars: Below peer group
  • 1 star: Lowest rated

In addition there is a “G” rating also. If there is a “G” in front of your bank, then that means that the bank has grown its assets more than 25% in the last year and some of this growth may be through risky financial assets. This should be a cause of concern.

This is a good tool for people who have their money in smaller banks and wish to track their health. It will help you not to panic if the bank is in good condition. Or conversely take swift action if you find something wrong with it.

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