Ask Terry Questions Evaluating a Community Bank

Evaluating a Community Bank

By Terry Savage on May 25, 2023 | Wild Card

Hi Terry – we have followed your fee-only fiduciary & I-bond advice, so thanks for those! But I heard you rhetorically question on WGN yesterday ‘why anybody would have FDIC insured level deposits in a bank?’ (vs T-bills or a very Large bank).
We live in a small town of 5000 in Iowa and have 2 community banks that support local causes so that is why. Ours has been willing to match the T bill auction rates I’ve heard you note on the radio for our short term CDs.
But given what you said, how would I verify my bank is in good standing and my money would be at relatively low risk of needing FDIC protection (assuming there is always some risk)? Thanks!

Terry Says

You mis-heard me! I asked why anyone would have deposits potentially ABOVE the FDIC-insured limits in ANY bank!

And if your deposits are below the insured level, you have no reason to worry. And no need to check up on your bank. That’s the job of federal regulators!

I firmly believe in community banks. And the good they do for local businesses and organizations. If they are mis-managed,then the owners (shareholders) lose money — not the insured depositors.



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