Banks Still Failing

On Friday, July 17, four more banks were shut down in California, Georgia, and South Dakota. That means 57 FDIC insured banks have closed this year.

Is it just me or does this mean we need to choose the banks that hold our money more wisely? No, I’m not worried about my bank balance reaching the FDIC limits (I wish!). But, I still don’t want to have my money at a questionable institution. It might not seem like a real concern, but I think it’s a matter of principal.

So, what should we be looking for in a bank? Well, there’s the obvious: convenience, services, and fees. But, isn’t there more we should consider?

Try Bankrate.com’s Safe & Sound® service. It tests institutions to measure their capital adequacy, asset quality, profitability, and liquidity.  Sounds easy, but I found the site didn’t list my bank (although it is one of the bigger US banks).

Then I did a Google search and found the site www.advisorperspectives.com had a great article about my bank’s performance, but I was really looking for something more simple and compact.

I moved on to a site I’m more familiar with: MSN Money. Along with the usual financial data, MSN Money offers a very helpful stock summary. I learned my bank is expected to match the market over the next six months, but that it has above average risk. At this point, I think I’ll keep an eye on the situation, but I’m not worried my bank is in trouble.

The bottom line is: If you want to check on your bank, treat it like any other investment and do your research.

UPDATE:  As of July 24, 2009 the count of failed banks rose to 64. There were 25 last year and 3 in 2007.

UPDATE: As of October 23, 2009 the count of failed banks was at 106 for 2009. That’s the most in almost 20 years!

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