Approximately 94.6% of U.S. households were using banks in 2019.
For the longest time, banks have been one of the safest options to keep your money. When you set aside money in a bank, you can’t misplace it, and a fire outbreak can’t destroy it.
But how reliable and safe is your bank? How do you find a safe bank? Here’s a guide to help you learn more about banks and how to choose the best one.
Do a Thorough Research on Your Bank
An excellent place to start is checking out your bank’s Weiss Ratings. The Weiss Ratings for banks look at factors such as stability, liquidity, profitability, asset quality, and capitalization. The rating system uses a letter grade format; the higher the rating, the safer the bank.
Check Their Insurance Coverage
Ensure the bank you use is insured by the Federal Deposit Insurance Corporation. This protects you against the loss of your deposit in case an insured bank fails. If you choose to put your money in credit unions, they must be insured by the National Credit Union Administration.
Check Out the News
Be on the lookout for any financial news that suggests your bank is being sold or acquired. This can be a sign of financial distress.
Some signs your bank may be struggling include a bank run, laying off staff, getting rid of incentives, high fee increases, and closure of several branches. These signs often indicate that the bank is in a financial crisis and trying to preserve money.
Mind the Cap
Although your funds are insured, they may be insured at $250,000 per account, per person, and per entity. Therefore, it’s recommended to put your additional funds in another reliable bank or into certificates of deposit—which the FDIC also insures. Don’t put all your money in one bank.
Online Banking
Today, most banks come with online banking options to make the banking processes fast and easy. But with online banking comes hacking risks. Reliable online banks should invest in various security features, including two-step verifications, SSL encryption, firewalls, automatic logout, and more.
Check Bank Reviews
Check out different rating services to see how your bank ranks. The FDIC has a confidential list of analyzed statistics that indicate a bank’s financial stability and health, including overall bank assets, payback, number of outstanding loans, and loans the bank has written off.
Also, look at online reviews from trustworthy bank clients to learn more about your prospective bank.
Choose a Trustworthy and Safe Bank Today
Advancements in banking technologies have indeed made our lives easier, but they have also brought about unpredictable fears. Finding a safe bank means assessing potential risks and choosing the ones with zero. The banking tips above should come in handy when looking for the best bank for you.
For more financial tips, be sure to read more of our finance blogs.
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