Are Any Non Mega Banks Safe Enough To Ignore 100K FDIC Limit?

[David Sklansky]

I want to throw a chunk of cash into CDs in one or two convienient walk in banks. Maybe a million or so. But I don't want to get totally ripped off just for the sake of safety, by accepting B of A type rates which are more than one percent below the best. On the othe hand, I don't want to take any more than about a one in a two thousand chance of losing my non insured money.

Does anyone think they know which, if any, banks in my neck of the woods ar within about a third of a percent of the top paying ones and are safe enough to ignore the FDIC? If so please tell me who they might be.

[Zygote]

[ QUOTE ]
I want to throw a chunk of cash into CDs in one or two convienient walk in banks. Maybe a million or so. But I don't want to get totally ripped off just for the sake of safety, by accepting B of A type rates which are more than one percent below the best. On the othe hand, I don't want to take any more than about a one in a two thousand chance of losing my non insured money.

Does anyone think they know which, if any, banks in my neck of the woods ar within about a third of a percent of the top paying ones and are safe enough to ignore the FDIC? If so please tell me who they might be.

[/ QUOTE ]

put your money outside the USA

[SteveOMS]

As a general and probably easier note you can just get additional insurance for amounts over the FDIC standard limits. Most banks will offer the additional insurance and it's fairly cheap to buy, should be much less then the one % difference in rates

Steve

[DcifrThs]

[ QUOTE ]
[ QUOTE ]
I want to throw a chunk of cash into CDs in one or two convienient walk in banks. Maybe a million or so. But I don't want to get totally ripped off just for the sake of safety, by accepting B of A type rates which are more than one percent below the best. On the othe hand, I don't want to take any more than about a one in a two thousand chance of losing my non insured money.

Does anyone think they know which, if any, banks in my neck of the woods ar within about a third of a percent of the top paying ones and are safe enough to ignore the FDIC? If so please tell me who they might be.

[/ QUOTE ]

put your money outside the USA

[/ QUOTE ]

i agree.

fly to Australia and open an account there. OR, open a eurodollar account in australian dollars.

then hope the currency doesn't actually depreciate like it should in terms of interest rate diffs.

Barron

[Zygote]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
I want to throw a chunk of cash into CDs in one or two convienient walk in banks. Maybe a million or so. But I don't want to get totally ripped off just for the sake of safety, by accepting B of A type rates which are more than one percent below the best. On the othe hand, I don't want to take any more than about a one in a two thousand chance of losing my non insured money.

Does anyone think they know which, if any, banks in my neck of the woods ar within about a third of a percent of the top paying ones and are safe enough to ignore the FDIC? If so please tell me who they might be.

[/ QUOTE ]

put your money outside the USA

[/ QUOTE ]

i agree.

fly to Australia and open an account there. OR, open a eurodollar account in australian dollars.

then hope the currency doesn't actually depreciate like it should in terms of interest rate diffs.

Barron

[/ QUOTE ]

the real best thing to do with US dollars now though is to buy silver.

i own australian dollars too though, not a bad a move in general.

[DcifrThs]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
I want to throw a chunk of cash into CDs in one or two convienient walk in banks. Maybe a million or so. But I don't want to get totally ripped off just for the sake of safety, by accepting B of A type rates which are more than one percent below the best. On the othe hand, I don't want to take any more than about a one in a two thousand chance of losing my non insured money.

Does anyone think they know which, if any, banks in my neck of the woods ar within about a third of a percent of the top paying ones and are safe enough to ignore the FDIC? If so please tell me who they might be.

[/ QUOTE ]

put your money outside the USA

[/ QUOTE ]

i agree.

fly to Australia and open an account there. OR, open a eurodollar account in australian dollars.

then hope the currency doesn't actually depreciate like it should in terms of interest rate diffs.

Barron

[/ QUOTE ]

the real best thing to do with US dollars now though is to buy silver.

i own australian dollars too though, not a bad a move in general.

[/ QUOTE ]

definitely agree that AUD is a good place to be.

why do you think silver would yield more in terms of opporutnity cost than AUD?

i don't see silver appreciating like other things right now given the direction of the US / global economy.

what are your thoughts?

thanks,
Barron

[brendanb438]

I agree not to get a CD. Invest in other currency. Euros, Canadian $ or even British Pounds. Or somehow open a foreign account in the currency of your choice and get the going rate for a CD in that country. What are the odds that you put a Mill into a US CD and a year or 18 months or whatever from now the US $ depreciates > than the % you earned against 1 of those foreign currencies?

[Jimbo]

Revocable Trust Accounts, estate planning trusts and or (living trust, family trusts) are insured for up to $100,000 for each person on the account. Or just ask the bank to use a CDARS (which will cost you a very small percentage of your total yield).

Or since you are the genius perform the math yourself, from 2001 through 2004 22 banks were taken over by FDIC and four of these banks failed to return 100 cents on the dollar on uninsured accounts when the final dividend was paid.


SOURCE: FDIC

<font class="small">Code:</font><hr /><pre> Failed Bank--- Date Closed----- Total Uninsured Deposits Repaid

Bank of Sierra Blanca
18 January 2002
65.35%

Sinclair National Bank
7 September 2001
82.17%

The Malta National Bank
3 May 2001
91.21%

First Alliance Bank &amp; Trust
2 February 2001
94.99%

</pre><hr />

The remaining eighteen banks that went under had returned, by the spring of 2005, anywhere between 30% and 98% of uninsured deposits, but they are still in receivership and could return more.

One percent of all the banks in the US fail each year.

This should give you all the data you need to compute your 1 in 2000 thousand chance.

www.idcfp.com is a good website to get an accurate rating of a banks solvency.

[ImBetterAtGolf]

We don't know the probability that a good bank will fail. There aren't enough events in recent years to estimate it very well. However, your requirements are fairly stringent and it may be that no institution today satisfies them.

In any event, retail bank CDs are unlikely your best alternative. If you think you are giving up too much owning Treasuries, you can find money market funds that both can get you where you want to be and are more liquid than CDs.

There are a lot of issues in the short term funding markets today, so since you appear to be quite risk averse, find a super vanilla 2a-7 fund.

I don't understand all the Australia stuff. Aside from being nonresponsive to the poster's question, Australia has been hit hard with -- US subprime mortgages!

[galmost]

Why AUD?