Are My CDs safe

[Danny]

Used to not worry at all about my CDs that I have bought through my brokers, some are issued thru IndyMac and Washington Mutual and their ilk. I have not exceeded the $100,000 FDIC for anyone issuer. I'm wondering if this credit squeeze and all the writeoffs being announce can in any measure impact the CDs...if it becomes a huge enough problem will the institutions renege on their obligations will the FDIC be able to deal effectively with the fallout...any thoughts....

 

[RetireeRobert]

Used to not worry at all about my CDs that I have bought through my brokers, some are issued thru IndyMac and Washington Mutual and their ilk. I have not exceeded the $100,000 FDIC for anyone issuer. I'm wondering if this credit squeeze and all the writeoffs being announce can in any measure impact the CDs...if it becomes a huge enough problem will the institutions renege on their obligations will the FDIC be able to deal effectively with the fallout...any thoughts....

As long as each if the CD's is from an FDIC covered issuer, you should be ok. Barring return of the Great Depression, of course.

Suggest you go thru the CD's one by one to determine each IS in fact FDIC covered.

 

[Danny]

Robert - thanks for your reply - They are FDIC...yeah that's what I 'm worried about - The Great Depression - the Sequel...although they tell me that can't happen again..

 

[CybrMike]

I'd be more worried about the fact that my dollar denominated CDs are falling in value because of the currency they were purchased in.

 

[Twinkle Toes]

Relax. If the bank holding your CD fails, the FDIC steps in and assigns the assets to another bank. If the FDIC determines the rates are too high on the CD, the rate can be lowered to market rates. I only saw that happen when the rate was really high and ususally when the term was long. Your "new" bank will notify you that they are the holder of your CD and things should proceed with no incovenience to you...as long as you are within the FDIC's insurance limits. If they "adjust" the rate/term of the CD, they will notify you and give you a period of time to withdraw the funds with no penalty. That's a short and sweet version of what happens. I've been out of the industry a while, but I can't imagine that it's changed much.

 

[Danny]

Relax. If the bank holding your CD fails, the FDIC steps in and assigns the assets to another bank. If the FDIC determines the rates are too high on the CD, the rate can be lowered to market rates. I only saw that happen when the rate was really high and ususally when the term was long. Your "new" bank will notify you that they are the holder of your CD and things should proceed with no incovenience to you...as long as you are within the FDIC's insurance limits. If they "adjust" the rate/term of the CD, they will notify you and give you a period of time to withdraw the funds with no penalty. That's a short and sweet version of what happens. I've been out of the industry a while, but I can't imagine that it's changed much.

thats interesting didn't know the FDIC could do that with the rate or transfer it....probably takes a while to get transferred?... thanks

 

[FinanceDude]

Relax. If the bank holding your CD fails, the FDIC steps in and assigns the assets to another bank. If the FDIC determines the rates are too high on the CD, the rate can be lowered to market rates. I only saw that happen when the rate was really high and ususally when the term was long. Your "new" bank will notify you that they are the holder of your CD and things should proceed with no incovenience to you...as long as you are within the FDIC's insurance limits. If they "adjust" the rate/term of the CD, they will notify you and give you a period of time to withdraw the funds with no penalty. That's a short and sweet version of what happens. I've been out of the industry a while, but I can't imagine that it's changed much.

It hasn't changed at all.........