This is how you tell your bank to be safe

Banks are trusted institutions and consumers expect them to keep their money safe while allowing it to grow and earn interest. But like any business, banks can run into financial difficulties and even fail.  

 If your bank fails, it could jeopardize your financial situation. Find out the signs your bank may be in trouble and what you can do to protect your account. 

 Bank Security Checklist 

 No matter which financial institution you choose, you can take a proactive approach to keeping your money safe with the bank or credit union of your choice. Insurance coverage: Only deposit your money in banks that claim to be insured by the Federal Deposit Insurance Corporation (FDIC) or credit unions that claim to be insured by the National Credit Union Administration (NCUA). 

  Only deposit your money in banks that claim to be insured by the Federal Deposit Insurance Corporation (FDIC) or credit unions that claim to be insured by the National Credit Union Administration (NCUA). Don't forget the limit: Even if your money is insured, coverage is limited to $250,000 per claim. person, per account, per organization. If you have extra money, consider depositing it at another bank or depositing it with a certificate of deposit that is also insured by the FDIC. 

While your funds are guaranteed, there is a limit of $250,000 per person, per account, and per unit. If you have extra money, consider depositing it at another bank or depositing it with a certificate of deposit that is also insured by the FDIC. 

This is usually a sign of financial difficulties. Research your bank: The FDIC keeps its list of troubled banks secret, but Weiss Ratings uses a similar rating system for ratings of safe banks. This ranks banks by grade and allows you to search for your bank. You can also rate the bank's Texas ratio. 

 Signs that banks may be in trouble 

 If you're not sure if your money is safe at your local bank, there are several signs that can alert you when the bank is in trouble. Your bank may be in trouble if: 

1.  Closes several branches 
2.  Separation of workers 
3.  Get rid of incentives like free accounts 
4.  Expenses have increased dramatically 

 These are usually signs that the bank has financial problems and is trying to save money. You can also look for signs such as lower deposits this year compared to last year by checking your bank's FDIC website. If a bank has deferred a financial report, such as an earnings statement, it could mean that the bank is undergoing a change in valuation.  

 Note If you really like numbers, check out the Consolidated Bank Performance Report on the Federal Financial Institutions Examination Board's website. This report shows various financial ratios and indicates whether your bank's capital ratios are deteriorating compared to its peers. 

 If the bank has financial problems, it may not have enough cash to cover all your payments. This is because the bank lends money to other customers. 

 Fortunately, banks also implement security measures to protect your money within certain limits. With a little due diligence, you can be sure your money is safe. 

 What is Federal Deposit Insurance? 

  One of the strongest guarantees is US government-backed insurance. For banks, you need FDIC insurance. Credit unions use NCUSIF insurance. 

  Note Although most financial institutions are insured by these government agencies, it is not mandatory. Please check your insurance is covered before paying. 

 Even with the FDIC, you can still lose money if you deposit too much at one institution. The insurance covers funds up to $250,000 per person, per account, and per unit. 

 This means that if you have more than $250,000 in your account, you will need to split it into different accounts or even different institutions, with each account not exceeding $250,000. account 

 This ensures that if the bank fails, you won't lose all your money. You do not need to withdraw money from a troubled bank or participate in the operation of the bank. 

  Bank evaluation 

 If you want to avoid bank failures, avoid weak banks. You can identify weaker banks by checking rating services to determine your bank or credit union's rating. 

 After the financial turmoil of 2009, the FDIC had almost 900 banks on its "problem bank list." This confidential list analyzes statistics that indicate a bank's financial health and stability, including: 

• The number of outstanding loans 
• Payback or loss amounts 
• Loans the bank has charged off due to nonpayment 
• Overall bank assets 
• Net interest margins, and many other 

 

 By 2019, thanks to many key banking industry changes, the number of banks on the FDIC list numbered less than 60. 

 

 If banks continue to have problems and can't make it off the problem bank list, the FDIC steps in and takes control of the bank; sells it to a more financially viable, stronger bank; or liquidates the bank's assets and refunds all of the bank customers' deposits. 

 

 If you are worried that your money is at risk, pay attention to financial news. Banks that appear frequently in negative or surprising news stories might be close to failure.  

 However, if you are fully insured, you can choose to ignore the stories and leave your money where it is. Another bank will buy the assets, and in most cases, you'll be able to use your money without interruption.