JACKSONVILLE, Fla. — Bank failures from California to New York have been in the news over the past few months. The string of financial failures is prompting many to wonder if their bank is safe.
Kristy Jenkins, Owner of Jenkins Heating and Air in Jacksonville, is an expert at running her business. But when she recently sold her lake house, she had a dilemma. “There’s a trustworthy issue for me in the banking industry.”
But Jenkins realized she needed to put her money somewhere. She considered online-only banks that offer higher interest rates but didn’t like the fact that most didn’t have physical branch offices. “A lot of these online banks have phenomenal offers from an interest rate standpoint, but you don’t have a brick-and-mortar place to go”
Jenkins like so many Americans are reconsidering where to put their money after the failures of Silicon Valley Bank, Silvergate Bank, and First Republic Bank.
A recent Gallup Poll showed that nearly half of Americans are worried or very worried about the safety of their money in banks.
FDIC INSURED BANKS
Alex Sanchez, President and CEO of the Florida Bankers Association in Tallahassee, said if the bank is FDIC insured, consider your accounts safe. “President Roosevelt signed in the law, the Congressional legislation creating the FDIC in 1933. Not one American has lost one red cent in an FDIC insured account,” said Sanchez. The FDIC insures each account holder up to $250,000.
Sanchez said the recent bank failures were due to risky business strategies. “It’s a failure of management, and quite frankly, the failure of regulators not to catch and sanction the bank management in time,” he said.
There are two banks that have headquarters in Jacksonville, TIAA Bank which is currently being sold and Florida Capital Bank. Both banks have satisfactory ratings by the Federal Reserve.
The Federal Financial Institutions Examination Council has a special tool that rates banks. https://www.ffiec.gov/craratings/ You can search yours.
Banks need deposits and are competing for your money by offering interest rates not seen in years.
We found a slew of online banks offering rates between 4% to 5%. Apple has a high yield savings account paying 4.15%.
Here’s a link to a list of high yield savings accounts from Bankrate.com https://www.bankrate.com/banking/savings/best-high-yield-interests-savings-accounts/
READ THE FINE PRINT
But not all offers are simple to understand.
“The biggest challenge has been the fine print. That’s because banks are famous for fine print,” said Jenkins.
Landmark Credit Union in Wisconsin will pay you a whopping 7.5%. The fine print shows it only pays that rate on the first $500. Balances over $500 earn 0.10%.
Wells Fargo has a deal where they’ll pay you a sign-up bonus of $2,500. The catch is that you must deposit $250,000.
Sanchez said those rates may look attractive but it’s more important to make sure the bank is backed by the government. “There’s a lot of financial firms that will pay you 6% or 5%. But make sure they are FDIC insured because not all are insured.”
Credit Union can be insured by the National Credit Union Administration for up to $250,000.
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Jenkins still hasn’t decided where to put some of her money but she’s getting close. “I have a short list. But again, I’m still getting all of those together just to make sure I didn’t miss something. If you miss something, then shame on you.”