Best Bank CD Rates
In these turbulent times, there is more than meets the eye to the question.
The fact is the best Bank CD Rate may be with a bank that is about to fail.
And what good would the top rate do, if the bank failed the week after you opened up a CD.
So before jumping for the best rate, check-out the bank.
As a case in point, Washington Mutual up until the day of their take over by the FDIC had the best saving rate in the country at 5.
00%.
Millions of people took the time, in good faith, to complete the online application, fund the account, and trusted they would earn 5.
00%.
However, most of those people really lost money when you figure the time involved.
Another prime example was ANB Financial.
They offered top CD rates to retail customers and brokers.
In this case 100s of millions of dollars flowed into the bank.
Then the bank failed.
I must make it clear.
Nobody lost money (as long as they were under the FDIC insurance limits), but they did lose time.
Furthermore, with ANB, some people didn't get their funds back for 30 - 45 days because, in the case of brokered CDs, they had to wait for their broker to file the claim and get the funds back.
So here are my recommendations.
First, look for the best Bank CD rate and best jumbo CD Rates you can find.
Second, verify the bank is federally insured on the FDIC [dot] gov website.
Third, assuming that they are, look at the size of the bank (assets), their capital (or equity), the Equity/Asset ratio (look for 7% or greater), their profit (or loss), age of the bank (new banks usually carry an operating loss for about 3-years), and finally their total risk-based capital (should be 10% or higher and this means the bank is considered to be well capitalized).
If the bank with the top rates has a large loss, low ratio, and is under-capitalized, they may not be around much longer and you may want to accept a lower rate with a healthier bank.
Good luck with your search.
The fact is the best Bank CD Rate may be with a bank that is about to fail.
And what good would the top rate do, if the bank failed the week after you opened up a CD.
So before jumping for the best rate, check-out the bank.
As a case in point, Washington Mutual up until the day of their take over by the FDIC had the best saving rate in the country at 5.
00%.
Millions of people took the time, in good faith, to complete the online application, fund the account, and trusted they would earn 5.
00%.
However, most of those people really lost money when you figure the time involved.
Another prime example was ANB Financial.
They offered top CD rates to retail customers and brokers.
In this case 100s of millions of dollars flowed into the bank.
Then the bank failed.
I must make it clear.
Nobody lost money (as long as they were under the FDIC insurance limits), but they did lose time.
Furthermore, with ANB, some people didn't get their funds back for 30 - 45 days because, in the case of brokered CDs, they had to wait for their broker to file the claim and get the funds back.
So here are my recommendations.
First, look for the best Bank CD rate and best jumbo CD Rates you can find.
Second, verify the bank is federally insured on the FDIC [dot] gov website.
Third, assuming that they are, look at the size of the bank (assets), their capital (or equity), the Equity/Asset ratio (look for 7% or greater), their profit (or loss), age of the bank (new banks usually carry an operating loss for about 3-years), and finally their total risk-based capital (should be 10% or higher and this means the bank is considered to be well capitalized).
If the bank with the top rates has a large loss, low ratio, and is under-capitalized, they may not be around much longer and you may want to accept a lower rate with a healthier bank.
Good luck with your search.
Source...