Question about my bank

[shirlden]

I bank with Charter One. It is owned by Citizens which is a part of RBS. RBS is going down the tubes and is likely going to be nationalized. I have talked to the local people and they assure me that they are not in any trouble at all. However, I did notice that they had flyers out offering 3.5% interest on new savings account. It was obvious they are trying to raise some capital.
I have all my money in an Money market account and checking with this bank. My question, of course is, should I keep it there?? I need this to live on and cannot take chances. I am retired. Two of my neighbors have pulled their money out and "put it under the mattress".
They are paying nothing in interest, so why should I keep it there????

Advice greatly appreciated.

[elocs]

1. Ever hear of the FDIC? Your money is safe.

What will your neighbors do if their house burns down, or don't they believe that could ever happen?

Look here: http://moneysmartlife.com/fdic-insurance-coverage-and-limits-for-your-bank-accounts/

FDIC Insurance Coverage

To help manage the financial crisis the FDIC has raised the limit to $250,000 for all FDIC insured accounts through January 1, 2010.

Non Retirement Accounts
For typical savings and checking accounts the Federal Deposit Insurance Corp. or the National Credit Union Administration limit will return to $100,000 in 2010. For certain retirement accounts, such as bank-issued individual retirement accounts (IRAs), the limit is will remain where it is now – individual accounts are federally insured up to $250,000 per institution, a limit it raised from $100,000 in 2006.

Retirement Accounts
The $250,000 limit applies to traditional and Roth IRAs, Simplified Employee Pension (SEP) IRAs and savings incentive match plans for employees (SIMPLE) IRAs that are held within these institutions by employers as well as individuals. Self-directed defined contribution plans (including Keogh plans and 401(k) plans) are also included under this limit.

Under the FDIC/NCUA rules, all of an individual’s retirement accounts at the same insured institution are added together and insured up to $250,000. It’s also important to know that these retirement account insurance limits are separate from any other deposits the individual has at the same institution.

[shirlden]

3. Money is safe, but

How long does it take for the FICA to start repaying funds lost if a bank goes under? Guess, the better question for me is, should I keep a few months of funds somewhere else. I do need this to supplement my pensions, which are a bit short each month to cover basic expenses.
Looking now for work, as I lost my job six months ago. Not easy for a 73 year old to find any employment and I have vowed to starve rather than go to Wal-Mart. The fed policy of dropping interest rates, really made a huge dip in my income. Good news is that I did not have investments in the market. My siblings who did have lost a great deal of their retirement monies and all of us now in our 70's. We are the ones who played by the rules, were responsible and now are getting shafted.
I am not feeling sorry for myself, just anxious and afraid that I will outlive my savings.

[.... callchet ....]

6. WHen it comes to funding the recovery, the FDIC might not have any money.

Don't forget the FDIC is funded by an organization that is ten trillion dollars in debt. Duh ? The FDIC was the result of a tragedy ?

[elocs]

7. If the FDIC goes under, then the money in the mattress won't be worth anything anyway. Duh? n/t

[.... callchet ....]

9. It will be worth something sometime.

Double triple duh duh back. Better under the mattress than nowhere. When it is realized that money has to be put in circulation to work, it will be worth something. By the way , the first duh was calculated. Very insignificant compared to the realization of what is going to come from the ten trillion dollar debt. What is the US going to do. Sell off people to pay for it. Getting real close to Armageddon. Ten trillion is a real problem.

[elocs]

12. Just remember who started the "duh?" thing. (personally I find "duh" to be insulting)

Right now, at this time and moment, your money is safely backed by the FDIC without going into some future doom and gloom scenario. With that things could change that would make today's money worth as much as Confederate bill are now. There are no absolute and forever guarantees in life.

[.... callchet ....]

13. Sorry about that, was just trying to be funny, not insulting. Seriously.

Just thought is was funny counting on someone that was ten trillion dollars in debt to cover another debt. I have been writing on my web site for years about what was happening and going to happen. So far I have been right about everything. It may just be an animally and coincidence that I am right, but my reasoning has been aligned with the events as they have unfolded. I prefer that no money be in the stock-market unless you absolutely do not need it.

[Statistical]

2. I wouldn't put your money under matress BUT dealing w/ FDIC is not fun

I had a bank go under and FDIC paid after..... 9 months.

Dealing w/ FDIC red tape on money you need to survive is no fun.

If it were me and you can remove the money w/ NO PENALTY (i.e no lock ins or CD w/ early withdraw penalty) I would open an account at a "safer" bank. Try a regional bank or local credit union.

Of course if you have any money OVER the FDIC limit ($250,000) run don't walk to your bank and pull out enough to bring yourself under the limit.

Never EVER have money "under the mattress". Theft our fire could leave you bankrupt.

[.... callchet ....]

5. Don't forget the FDIC

is funded by an organization that is ten trillion dollars in debt. Duh ?

[.... callchet ....]

4. they assure me that they are not in any trouble at all

That is standard litany and they were telling you what you wanted to hear. Madoof said the same thing on the Wednesday before the Thursday he was arrested. He was still trying to sell the day before he got arrested. Which also proves his turning himself in was also a scheme. Everybody tells you to look at your situation and decide what is best for you. If you immobilize your money for awhile, how would that hurt you. If you lose your money how would that hurt you. Remember "risk". By telling you your money is at risk is in fact what it is. It is at risk. Just ike a doctor telling you , this may hurt. When it does hurt, is it softened by the fact that he told you it was going to hurt?

[CoffeeCat]

8. Have you looked up your bank on bankrate.com ?

Bankrate.com has very extensive documentation on banks. Bob Brinker recommends bankrate.com , it is
a great resource. Your bank will have a rating and a very lengthy explanation of why that rating was
given.

My bank is rated extremely low. We are in the process of removing money out of that bank and putting
it into a credit union. I asked one of the bank Vice Presidents about their low bankrate.com rating. She
insisted that "everything is fine!" and she even said she wasn't aware of the poor rating.

Excuse me, bankrate is an industry standard.

Recently, I've noticed this bank issuing press releases--touting the records they are breaking with new-account
openings.

Bottom line is--do your own due diligence and do not rely on the bank to tell you the truth. They want your money.
They only stay in business if you, and people like you, stay with them. It's not in their best interests to be honest
with you--if that means you pull your money out.

As far as the FDIC goes... I am shocked that so many people just assume because our government tells them that something
is insured--that we no longer need to make tough decisions. We can just avoid research or thinking about what is
going on around us---because the big FDIC will give us our money back. Really?

When Washington Mutual failed, many stories contained a line or two about the FDIC's resources being stretched--to the
point of nearly failing to cover all Washington Mutual deposits. WaMu was a big bank; the nation's largest. However,
it was ONE bank. And their resources were "stretched"? What is more banks fail simultaneously?

I've also heard that it's not lickety split that your money is returned. A poster in this thread said it took 9 months.
If all of your money is gone, will you be able to survive 9 months--waiting for a check from the government? If there is
widespread collapse, nine months might be a best-case scenario.

Look at how this government has failed us. Look at how this government is ripe with corruption. How can anyone believe
that our institutions are completely safe? Didn't we just give nearly a trillion dollars to American banks, and now
they refuse to tell us how they are allocating it? These people are not our friends!

As for having money in a mattress--it's not only smart to have cash at home, it's ESSENTIAL! How can you not have
emergency cash at home? Basic emergency preparedness dictates that you have some money at home--in case banks are
closed due to an earthquake, flood or other natural disaster.

Furthermore, you can purchase inexpensive safes for home use that are fireproof. When people say "in the mattress" I think
most of them mean that the money is in a safe place in the home. I can't imagine NOT having a portion of my money
at home--given today's volatility and given that most MMs or CDs are paying dirt-low interest. What's the loss of having
it at home? There's so much uncertainty now. When things ease up, or at least--when we have a more clear picture of where
this economy is going--people need to have some cash at home. How much is up to you.

However, to sail along in a fool's paradise--with all of your money in the banking system, and relying solely on the kindness
and solidity of the FDIC and the banking system--seems a bit reckless.

[.... callchet ....]

10. These were both from today's discussion

"She insisted that "everything is fine!" and she even said she wasn't aware of the poor rating".

"I have talked to the local people and they assure me that they are not in any trouble at all"

Read the writing on the thread.

My question is what do you have to lose if you play it safe for 6 months. Nobody is predicting an upswing.

[.... callchet ....]

11. If I am detracting from the discussion

just tell me to check something else.