"How can I tell if my bank is strong?"

[sabrinamari]

Questions:

"I need to open a money market account for my emergency fund, but I don't know how to choose a strong bank in this volatile market. What do I do?"

"I've been listening to the news and hearing about recent bank collapses and acquisitions. How can I figure out if my bank could be next?"


My answer:

You can start by looking at bankrate.com's "Safe and Sound' ratings.

Bankrate.com rates each financial institution on a scale from 1 (strongest) to 5 (weakest). Like any ratings system, it has its own strengths and weaknesses and should be used with caution as part of a larger research effort. You can read about the system here:

http://www.bankrate.com/brm/safesound/ss_home.asp

To use the 'Safe and Sound' ratings system to check on a bank's rating, go to:

http://www.bankrate.com/brm/safesound/ss_home.asp.

1. In the pulldown box where it says "Select," choose Banks/Thrifts or Credit Unions. Then click NEXT button.

2. You can find your bank in a number of ways -- by bank name, state, ZIP code, asset size or rating -- using the pulldown boxes.

For example, if you're looking for LaSalle Bank by the bank name, choose "Select institution by name" and choose L. Then click the NEXT button.

3. On the next page, hold down the arrow on the pulldown box and scroll down to find the specific LaSalle Bank (often there are several in different states). Once you've chosen the correct bank, click the NEXT button.

4. The next screen will show you the Safe & Sound rating for that bank.
You'll also have the option to read the report or financial summary on your bank.

Comments

[diekonigin.livejournal.com]

Thanks for posting this. I need to parachute out of Wachovia and was not looking forward to keeping my money in a shoebox under the bed like my grandparents did!

[puckmls.livejournal.com]

I checked our local bank. 5 stars and a CAEL rating of 2. I think that any money we put there is pretty safe. Thanks for sharing this information with us!

[sabrinamari.livejournal.com]

I'm glad this helped!

[sabrinamari.livejournal.com]

So pleased that things look good for your bank...

[boy-pastiche.livejournal.com]

5 and two baby! wooo!