<p>I have all my money in one bank. I checked yesterday with the bank, got it in writing, and checked the FDIC site and it is all FDIC insured. Without naming names, I think this bank is in deep trouble and have had a bad feeling about it for quite a while. Even though I’m FDIC insured, if this bank went under, so many people would be affected I don’t think I’d see my money for a long, long, long time.</p>
<p>I am thinking of moving some of my money out of this bank into another or perhaps several others, but how do I ensure that the new bank(s) is not in financial trouble?</p>
<p>If your money is less than $100,000 you will get all your money, if it is more than $100,000, I will advice you to withdraw the excess and put it in a different bank.</p>
<p>The share price of one of my banks has dropped over 35% within the last couple of days. It is not in good shape.</p>
<p>Check for banks that do not have large mortgage departments, or involved with the housing industries.</p>
<p>Wells fargo seems to be in good shape (based on what they self reported, they could be cooking the books).</p>
<p>I’ve been trying to spread my money out between banks. I use the ratings at [Compare</a> Mortgage Rates | CD Rates | Credit Cards Home Equity Loans Mortgages Best Rate Calculator Bankrate.com](<a href=“http://www.bankrate.com%5DCompare”>http://www.bankrate.com). I hope they’re reliable. They warned people about IndyMac just prior to the collapse, but I believe their rating had been quite low for a while.</p>
<p>OMG, I post their web site and get a mini advertisement. Sorry!</p>
<p>In today’s Los Angeles Times, a banking analyst was quoted as expressing deep concern that with all the publicity about IndyMac (10-hour lines yesterday in L.A. area, people screaming at security guards, police called in to maintain order, people’s online accounts showing the ‘disappearance’ of tens of thousands of dollars, FDIC officials inside not know why that was, etc…) that there might be a run on other banks, leading to their failures. </p>
<p>Is it hyperbole to suggest that this feels a lot like 1929 (not that I was there, of course). </p>
<p>H and I have most of our net worth in our a) house and b) retirement accounts, spread between completely separate 401K, 457, 403b, SEP. We have relatively little “in the bank” aside from the college account that is currently invested in both a US Treasure Money Market at a national bank and in a savings account in our local credit union. Our checking and family savings (measly though they are thanks to expensive kids and rising cost of living and my husband’s book addiction ) are at a national bank. </p>
<p>So I think we are diversified in terms of institutions and types of accounts. I should feel safe, so why do I have this uneasiness? (maybe it’s just empathy for those people standing in the IndyMac lines?)</p>
<p>I think many people are questioning their financial institutions right now. My husband works for a large business and they just changed banks within the last 60 days because they were worried about the ratings of a large Ohio-based bank they had been using. If the bank really is in trouble, it doesn’t help to have all the clients leaving, either.</p>
<p>So if there ends up to be a lot of runs on the banks, wouldn’t most of the money just end up in another bank which will ultimately negate the problem for at least the majority of the banks? I doubt too many people will be stuffing cash in their mattresses.</p>
<p>Person A has 150K in bank 1 so they decide to split it between bank 1 and bank 2.</p>
<p>Person B has 150K in bank 2 so they decide to split it between bank 2 and bank 1. </p>
<p>The net result is the same for both banks. The issue will be when everyone wants to pull out of bank 1 and use only banks 2 and n. This probably wouldn’t happen unless the bank was in fairly dire straits which some of them might be.</p>
<p>I would note that Fitch downgraded BofA today from AA to A+.
“NEW YORK, July 16 (Reuters) - Fitch Ratings on Wednesday cut its ratings on Bank of America Corp (BAC.N: Quote, Profile, Research), citing losses from marking down assets including home loans and the potential for other losses including in its credit card portfolio.”</p>
<p>I know the rating agencies have been lambasted in the press, but I would still rely on their judgment as the best available. S&P lists the ratings on 577 financial institutions for free on their web site. For example, they currently carry a AA on Bank of America, but with a negative outlook so that indicates a likely downgrade. With that said, an “A+” rating is still very decent. The list lets you see every financial institution you could possibly care about and compare.
<a href=“Home | S&P Global Ratings”>Home | S&P Global Ratings;
<p>Moody’s website is unfortunately subscription only, but Fitch lets you see all of their ratings for free. It can be confusing, but is a place to start if you really have concerns.</p>
<p>Not sure that B of A is “fine”, although it is hard to believe that it could fail. Same goes for Citigroup. But who knows? Things feel very scary out there. I had to reassure the 85+ year old couple down the street that their retirement accounts and bank deposits are covered. They don’t know what to think.</p>
<p>ucsd<em>ucla</em>dad, some banks are in dire straits right now. They’re trying to make up for it by offering very attractive rates. Is it right for people to transfer money to these banks, believing that the FDIC will bail them out if the bank goes under? </p>
<p>I just asked my husband how his company’s new bank is working out. He said, “Oh, it was too difficult to switch banks so we just took out a larger loan amount with the current bank so that if they go under, we’ll owe them more than they owe us.”</p>
<p>Last night I was talking with my husband about IndyBank. We are fine for our personal accounts since we don’t have alot of available cash but for someone who runs a business with lots of cash flow it is pretty scary. If your bank goes under you stand to have a large amount of cash that is not insured. But to spread your accounts between different banks is a bookkeeping nightmare. For a short term solution the owner of his business has moved some of the cash into T bills while they search for a solution.
Pretty scary stuff.</p>
<p>Credit unions have only been mentioned once in the thread. Just like banks and S&Ls deposits are federally insured to at least $100,000 through NCUA rather than FDIC. Amidst the problems with banks, I never hear about credit unions being in trouble.</p>
<p>I read in today’s paper that some banks are putting long holds on IndyMac checks that ex-IndyMac account holders have received by withdrawing their funds. 7 biz days, for example…</p>
<p>One story featured in the paper concerned an IndyMac account holder who wanted to deposit her check into a WaMu account! The lady is a glutton for punishment.</p>
<p>standrews, I think I was the one that mentioned credit unions. We have a savings and checking account in our county credit union. I don’t think they even make home loans, just car loans, so I would have a hard time believing that they have been acting with abandon or that there is any chance they will go under. </p>
<p>As for the comment about different banks and the difficulty of bookkeeping. I can see how for a business it might be difficult, but for a family, it’s not that bad with online access to statements, transfers, etc… </p>
<p>ellenmenope, I read the same article as you did this morning and almost choked on my coffee at the part about the lady being told she “can’t” deposit her Indymac cashiers check at WaMu. I said to my H “she’s being done a huge favor and she doesn’t even know it.” Not that I know anything, but it does seem that that particular bank was riding pretty high during the real estate boom… lots and lots of advertising on TV, radio, print and it seemed like they came out of nowhere. On the other hand Wells Fargo and BofA just seemed to sail the same course as always in terms of marketing/advertising. It’s just a hunch, but I would not be surprised to see WaMu on a list somewhere.</p>
) are at a national bank. </p>