by Lee R. Phillips

Here’s a little PS on the bank rating information previously posted.

Several years ago, I shopped for the best rates on a CD investment I had. I picked a coupe of banks that offered great rates (for the time anyway). Funny thing-both of the banks I picked were the first to go under when the banking crisis came. They were immediately bought out by bigger banks and everybody was happy. However, I got burnt to a small degree.

You need to pay attention. The banks “on the edge” are the ones that offer the higher CD rates. They need to raise capital desperately, and to get money in the door, they offer the best rates. In addition to checking out the bank’s rating (see instructions in my previous blog) you can also see if the bank has had any enforcement actions issued against it by the Feds. Usually, before the bank fails the Feds will try and change its risky behaviors by issuing enforcement actions against it. Go to www.FDIC.gov to find enforcement actions against your bank. (more…)