How Safe is Your Bank?

We've been seeing a lot of bank failures lately. Have you thought about checking your bank's safety? Here's how.

The FDIC keeps a ratings list on American banks. Unfortunately, it doesn't publish that data. There are, however, several organizations that do. The most popular is Bankrate.com's Safe and Sound rating service. Under this system, each bank is assigned two different ratings. One rating uses stars; five stars is good, one star is bad. The other rating uses numbers, with 1 being good and 5 indicating a less-than-rosy future for that bank.

When I checked our banks (yes we have more than one), I was shocked to learn that one of them got a one-star rating and a numeric rating of 5. Some of the other banks we use, all of which are large banks, had three-star ratings and a numeric rating of 3.

I encourage you to go to Bankrate.com on a regular basis to monitor the health of your bank. The company has a link to its Safe and Sound rating system somewhere in the middle of the home page. (The link gets moved from time to time.)