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I am moving and will be switching one of my accounts to a local bank. I was wondering what is the best way to determine a banks financial stability? Does the Federal Reserve publish something? If so, can it be trusted since they are the morons that caused a lot of the recent bank mess?

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This question has a link to Texas ratios for banks. The data is over 2 years old but I'm not sure if new data is published anywhere. (money.stackexchange.com/questions/3071/…) –  Muro Apr 27 '11 at 22:02
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3 Answers

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It generally doesn't matter since the Government guarantees accounts at most banks. Just make sure it is FDIC insured (or NCUA if it is a credit union) and you will be fine even if the bank goes insolvent.

In any event, I'd strongly suggest joining a credit union instead of a bank. The fees are much lower and I've found them much more customer service oriented.

As to the morons who caused the bank mess, you may be in trouble there. I'd argue that Gov't policies were probably more to blame for that than banks. Regardless of fault, and even during the worst of that mess there was never any hint that anyone's bank accounts were at risk. The problem was that a lot of people had loans they couldn't afford to pay because there was too much incentive to make risky loans and not enough downside to the banks originating the loans when those loans went predictably bad.

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I agree. I just went through this with one of my banks, and it was pretty much a non-event. One day I logged in to the online service, and it said the small local bank was taken over by US Bank. Everything, checks, ATM cards, online access, never stopped working, and other than the logo on the website nothing has changed. –  KeithB Apr 28 '11 at 12:56
    
The morons I was talking about were the government and their policies. So it sounds like we are in agreement. Thanks for the help. –  mpenrow Apr 28 '11 at 13:26
    
Wow. That's pretty crazy advice. I'd suggest looking at some news stories from the 80's when S&L failures overwhelmed the FDIC's funds and some payments took awhile. –  duffbeer703 Apr 28 '11 at 14:15
    
@duffbeer703 - It's all about acceptable risk levels. If you are still freaked out because 30 years ago some people had to wait to get access to their funds (but did eventually), then I suppose a better mitigation strategy would be to spread your money over several banks. If the government AND banks go insolvent I'd say you have bigger problems than your checking account. –  JohnFx Apr 28 '11 at 14:33
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BankRate.com has always been useful to me to compare banks. Here's a list to their system which is updated quarterly.

http://www.bankrate.com/rates/safe-sound/bank-ratings-search.aspx

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This site lists the texas ratio for banks. This ratio attempts to determine how much capital a bank has in order to cover loan losses. I always deposit my money into at least two (2) different banks. I make sure at least one of the banks has a texas ratio below 25. I do not expect high yields on deposits in this bank but hopefully the bank is not at risk of going under.

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