Financial Tip: Safe & Sound Bank

If you haven't heard it by now, IndyMac Bank has been closed by Office of Thrift Supervision. On their website, www.indymacbank.com, you will see the FDIC information. If you are one of the unlucky people who still have some money in IndyMac, you will be glad to hear that IndyMac is FDIC insured. FDIC will go through the list of customers, and return the insured money. The insurance is limited to $100,000 per person per bank: checking accounts, saving accounts, and CDs (Certificates of Deposit).

For those who keep up with economy news, the closing of IndyMac on Friday is not a surprise. Their shares headed southward since mid-2007, and dipped below $1.00 for many weeks now. For many savvy investors and knowledgeable customers, they probably transfer their money from IndyMac to another bank already. But for most IndyMac customers, the shutdown is a wake up call. Who would have figure that a well known bank would close down? Well, they just did. Now you know. Let this be a lesson. Nothing is fool-proof.

You might wonder, how do you find out if your bank would go belly up like IndyMac? You could keep up with the daily news about your bank on Yahoo! Finance. It is probably the safest bet. However, it can be difficult to understand the news if you can not understand all the jargons.

Luckily, there is an easier way to determine how well your bank is doing. Just simply look for the Safe & Sound rating for your bank from Bankrate.com. If your bank has three stars or more, then it is not going to go belly up any time soon. But if your bank has a star or two, consider transferring part of your money to a more secure bank. However, if you decided to stay with bank, keep your deposit below $100,000 for FDIC insured accounts, and move out uninsured investments.


* BankRate.com - Safe & Sound rating
* Yahoo! Finance