Protecting Your Money

The Federal Deposit Insurance Corporation recently released its updated list of “trouble banks” for the second quarter. The list grew to 117 banks, up from 90 the previous quarter. This is the highest level since 2003. Many analysts are expecting as many as 150 banks to fail in the near future. This year we have already witnessed the failure of nine.

Provided below are some of the steps CNNMoney.com advises you to take to assess the security of your bank.

First off, it important to know the risk your bank is facing. The names of the banks making the FDIC’s list are not made public, but you can find out about the relative health of your banking institution at bankrate.com. It is also wise to be aware that smaller and mid-sized banks cannot raise the capital that their larger counterparts can, therefore they face a much greater risk of failure if they are in trouble.

You don’t need an internet connection and a web address to spot trouble signs at your bank. If you look in the newspaper and notice a large amount of layoffs, cutbacks in services, no new loan submissions being accepted or generous CD yields advertised on T.V. or at the bank it may be time to begin worrying.

If you have a personal account and a joint account with a spouse you may be insured up to $100,000 on both accounts by the FDIC. However, if analysts’ predictions are correct and 150 banks fail in the near future, it could cause severe problems for the FDIC. The system is perfectly suited to handle a few closings here and there, but the failure of 150 banks could devastate the system and force the FDIC to call upon the United States Treasury for funds to help cover its insured deposits - essentially repaying taxpayers with borrowed money.