Weak Bank, Good Rates?
26 May 2008One of the ironic and concerning things about the banking crisis that we’re enduring this year is the fact that it is typically the most troubled banks which offer the most competitive deposit rates. That is because banks which are struggling, such as Indymac Bank, are very keen on gaining new deposits to add to their balance sheets and offset the large lending losses they may have taken on their books.
This works, because deposits, even in troubled banks, are insured by the FDIC. Established in the late 1930s, the Federal Deposit Insurance Corporation was established to guarantee deposits in the event of a bank failure. Deposits are insured up to $100,000 per person or $200,000 per couple.
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