Dear Dr. Don,
How can I find out for sure if Ocean Bank is safe? I never heard of it before. They said they are insured by the Federal Deposit Insurance Corporation.
I did buy a CD with them for 13 months at 4.75 percent and now I am thinking of a money market account with them at 3.5 percent through April 2009. Their rates are the highest in this area — that’s why I’m concerned.
— Mildred Mull
Dear Mildred,
A brick-and-mortar bank will have the FDIC insurance sign on its door. An Internet bank will have the logo on its Web site.
For belt-and-suspenders types, like me, you can find out if a bank is FDIC-insured by looking them up using the “Bank Find” feature on the FDIC Web site. Twenty-two banks came up for “Ocean Bank” so you’ll have to go online yourself to find your bank.
You can also check your bank’s financial safety rating using Bankrate’s “Safe & Sound” ratings. The graphic below describes the ratings:
| Star rating | Definition |
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Superior |
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Sound |
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Performing |
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Below peer group |
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Lowest rated |
| Not Rated “NR” | Complete data not available |
| Closed | Institution is closed |
| G | Designates high growth |
Bankrate also provides a copy of the bank’s financial statement or a memorandum on its financial status.
I don’t see a problem in chasing yield when you have FDIC-insured deposits in a financial institution, or credit union shares insured by the National Credit Union Share Insurance Fund, or NCUSIF. FDIC- and NCUSIF-insured deposits (shares) carry the full faith and credit pledge of the U.S. government.
Monies on deposit with a credit union are called shares because credit union members are also the owners of the credit union.
Feel free to chase higher yields in accounts with insured deposits (shares), but remember that yield isn’t everything. Safety, convenience and liquidity are also important factors in choosing the type of account and where you bank.
