September 27, 2017: New bank and credit union star-ratings are now available from BAUERFINANCIAL, Inc., Coral Gables, FL, the nation’s leading independent bank and credit union rating firm. Star-ratings are assigned on a scale of zero to five-stars with five being the strongest and reflect the overall financial health of the institution.
Recommended banks and credit unions (those rated 5-Stars or 4-Stars) now exceed 80% of the industry and fewer than 300 institutions are rated currently rated 2-Stars or below. Given that, there is a high probability that your financial institutions are well-rated, but what might happen in the unlikely event you find yourself doing business at a bank that fails?
- You could see a disruption in any direct deposits going to that bank, whether it be a paycheck, social security or disability benefits, child support, or even an IRS refund.
- When a bank fails, regulators are required to try to find the least costly resolution. That sometimes means that deposits will be sold to an acquiring institution while the FDIC holds on to the loans. Anyone with a loan or line of credit would then find themselves dealing with a regulatory agency.
- While exceeding the deposit insurance limit is a lot less common since the limit was raised to $250,000, it does still happen. The sale of a house, insurance or death benefits, cashing out a 401k, are just a few examples of how this could happen. If you’ve parked a large sum, even just for a few days, and the bank fails, you are subject to lose everything over the insurance limit. It just isn’t worth the risk.
Visit bauerfinancial.com today to look up the rating of your bank(s) and/or credit union(s). Then mark your calendar to check again next quarter. It takes just a few moments and could save a lot of headaches as well as cash. While you’re there, check out our CD rate pages to get the best CD rates in the country and read all about the current status of the banking industry.