A high yield on a CD or money market account is enticing, but make sure the bank is insured by the FDIC before you jump into a contract. The FDIC, or Federal Deposit Insurance Corp., protects up to $250,000 per depositor per institution. That means that if the bank fails, you still retain your money. Banks not insured by the FDIC may not have the same insurance rules and regulations.
Look for the logo
Banks insured by the FDIC commonly post the FDIC logo on the door of every branch. Look for the logo when entering a branch or ask a staff member to show you the FDIC certification. Online banks will have a logo on their websites to certify that they are FDIC-insured.
Visit the FDIC bank search website
The FDIC has a bank search option on its website to find federally insured institutions by different criteria. Search by name, address, city, state and ZIP code. This will pop up a list of banks insured by the FDIC from which you can choose.
Safe & Sound ratings
Bankrate offers financial safety ratings on banks with the Safe & Sound rating system. You can search by name, star rating and by asset size. Bankrate has a five-star rating system with five stars being “Superior” and one star being “Lowest rated.” A memo and a financial statement on each bank are also included. You can also check your credit union for its financial standing with the Safe & Sound rating system.
To calculate the yield you’ll receive on a CD or money market account, use Bankrate’s investment calculators.