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How do I: Know if my bank is safe?

Topic: PERSONAL FINANCE
Who is affected: CONSUMERS AT ALL LIFE STAGES
DEGREE OF DIFFICULTY: EASY
What you'll need: BANKRATE'S SAFE AND SOUND STAR RATINGS, NAME AND LOCATION OF YOUR BANK

What you need to know

Now that financial institutions are going belly up, more people than ever are concerned about their own money and their bank's safety.

While the Federal Deposit Insurance Corp. keeps a secret running list of banks to watch, Bankrate has its own system measuring the strength and stability of U.S. commercial banks, savings institutions and credit unions.

Bankrate measures the banks based on the CAEL system, which stands for the capital adequacy, asset quality, profitability and liquidity.

To find out how safe your bank is, go to Bankrate's Safe & Sound bank ratings.

Choose whether you have a bank, a thrift or a credit union, then click "next."

To find your bank, search by one of the options given: bank name, state, ZIP code, asset size or rating.

After following the instructions for which option you choose, the Safe & Sound rating will appear for that bank. You'll also have the option to read the report or financial summary on your bank.

Step-by-step
Check out the Bankrate feature "How safe is your bank?" for an explanation of how banks are rated.
As an added safety measure, keep your money safe by never housing more than $250,000 in any one account, so that your money is FDIC- or NCUI-insured. Try investing extra funds in CDs or money market accounts.

 

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