Thursday, October 9, 2008

Bank Question

Someone at work heard about a website that is keeping tabs on the health of the banks. She wanted to know about hers, Fifth Third Bank in Charter One. Can anyone help?


  1. The name of the site is Bauer Financial and Fifth Third currently has a three star rating. Your coworker found out about this site, most likely, in this Sun Times article.

    I would like to caution against putting too much weight into a site or rating like this. Most likely your coworker is not seeking to invest in a bank, she is simply looking to make sure her money is safe. It is improbable that she is holding more than $250,000 (the new FDIC limit) at the bank, and thus, she is just as safe as at any other FDIC bank (any bank she would open an account at).

  2. Thank you very much Jumco, I'll pass the message along. You're probably right, I think it's just her savings account.

    Have any banks defaulted on savings accounts (I don't even know if that questions is worded correctly)?

  3. Yes, when a bank defaults or fails, all of its accounts fail. For stakeholders and business partners of the bank, there is then a process of trying to sort out the seniority of various monies owed, etc.

    This, however, is a lot less scary than it sounds. For example, when WaMu failed, not a single dollar of insured deposits was lost and most customers could not tell the difference between a WaMu run WaMu and a JPMorgan Chase run WaMu. Depositors are very different than stakeholders and trading partners.

    Again, if she does not have more than $250K in the bank, she no more to worry about than if her bank had 5 stars on Bauer Financial or any such site.


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