When you decide to open a new checking or savings account, how do you decide which bank to go with? What about money market accounts? Credit cards? If you aren’t running a thorough background check on a bank you’re considering, you could be putting your money in the wrong hands. A better idea is to check your bank’s credit rating to make sure it’s worthy of your cash.
Although the FDIC and other government organizations will not share your bank’s credit rating with consumers, it is easy enough to run a background check. Just as a credit card company would do if you were applying for a new card, you should check up on what your bank has been doing since its inception. One of the most valuable resources for this activity is the Safe & Sound program from Bankrate.
Safe & Sound is a system for allowing consumers to check their bank’s credit rating. All you have to do is select what type of financial institution you want to research (bank or credit union, for example), then search for the particular bank you are interested in. It allows you to search based on the institution’s name, state, zip code, asset size or rating, depending on your needs.
When you view that bank’s credit rating, you’ll find a variety of information, including their location and telephone number. It provides data such as net profit/loss, deposits, equity, asset size, and earnings rating. Each financial institution is issued a comprehensive rating from one to five stars, five being the best and one being the worst.
Of course, Safe & Sound isn’t the only way you can check your bank’s credit rating. You can also visit Bauer Financial to view their rating system for banks and credit unions. Here, financial institutions are also given a score of one to five stars, and you can choose from five different financial reports to understand the bank’s credit rating.
The difference, of course, is that Bauer Financial requires you to pay to view more than just a bank’s credit rating (such as the detailed reports), while Safe & Sound is free. Nevertheless, I’ve discovered that many banks have different credit ratings on each of the sites. For example, Bank of Texas gets only one star at Safe & Sound, while Bauer gives it 3.5 stars.
If you aren’t interested in viewing a bank’s entire credit rating, you can also look at the complaints filed on the Better Business Bureau. Rather than learning the financial aspects of the bank, you’ll learn how customers view the service given by different financial institutions. This in itself can be illuminating.Read More →