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With all the talk of bank bailouts, a bank rating is suddenly important. A bank with a poor rating can put your money at risk. Here’s why.
FDIC Insurance
If you have more than $250,000 in assets tied up in your bank, then anything over that amount may not be covered should something happen to the bank. The FDIC insures money up to $250,000. If the bank has a poor rating, the financial institution can be at a higher risk of collapse.
If you check your banks rating and it’s not great, you may want to consider moving some of your money over to another institution with a higher rating. This will insure you will not lose as much money should something happen.
Mortgage Lending
With the recent news on the sub-prime mortgage collapses, if your bank has a high rate of mortgage debt, then it may be a higher risk. You may want to start asking questions, especially if your mortgage is held through the bank. You may want to secure your money with a bank that has a lower ratio.
How Does a Bank Rating Effect Your Money?
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