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Old 05-31-2018, 11:47 PM   #1
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Bank ratings

I check every bank's ratings before doing any type of business with them at all as we do have "flaky" (low rated) banks in our state I stay away from also. Curious if anyone else does this also or am I stuck on the past? Yeah I know FDIC but I'm usually the one examples are made of!
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Old 06-01-2018, 05:03 AM   #2
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I do business with the bank that has a great checking account computer system. Otherwise, they are kind of generic. After bank problems in the past, the FDIC makes them substantiate why they made any loan rather than turning them loose to do business.

Our town has 17 different banks, and all but one have about no floor traffic. One big national bank has about 12 office spaces and only 3 bank officers--a ghost town. Apply for a loan and they refer you to a computer terminal at a table. Customers could have signed into the same computer from home.

If I was to borrow money, it would be at a credit union.
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Old 06-01-2018, 05:12 AM   #3
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I go by fees.
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Old 06-01-2018, 05:51 AM   #4
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Originally Posted by Hyper View Post
I check every bank's ratings before doing any type of business with them at all as we do have "flaky" (low rated) banks in our state I stay away from also. Curious if anyone else does this also or am I stuck on the past? Yeah I know FDIC but I'm usually the one examples are made of!
Yes, I have whenever I consider opening a new online high yield account.

I also review customer reviews/comments particularly with respect to ease of moving funds, customer service, etc.
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Old 06-01-2018, 07:47 AM   #5
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After messing with higher rate savings accounts advertised online, I went with Tbills through Treasury Direct. 1 month bills are yielding around 1.7%, no FDIC limit like a bank must have, no state income tax due on the interest. You can get higher yields on longer maturities and just use the 2ndary market to resell them without penalty if you need the money back before maturity.
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Old 06-01-2018, 08:22 AM   #6
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You can get higher yields on longer maturities and just use the 2ndary market to resell them without penalty if you need the money back before maturity.
Selling them on the secondary market at a discount plus fees is the penalty.
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Old 06-01-2018, 08:42 AM   #7
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After messing with higher rate savings accounts advertised online, I went with Tbills through Treasury Direct. 1 month bills are yielding around 1.7%, no FDIC limit like a bank must have, no state income tax due on the interest. You can get higher yields on longer maturities and just use the 2ndary market to resell them without penalty if you need the money back before maturity.

I'm currently getting 1.6% on my online savings account at Discover. I can deposit or withdrawal money at any time, and easily make transfers to my accounts at my local bank. FDIC insured, of course, but I'm well within the limits so that's not an issue.
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Old 06-01-2018, 10:03 AM   #8
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On "with respect to ease of moving funds".....after the recession I wanted to move a large amount from one of the local banks I was using and they seriously said NO! After getting my blood pressure stabilized, I withdrew every penny and deposited some choice comments. I'm slowly moving towards all VG, Fid accounts but still check bank ratings for cd.
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Old 06-01-2018, 10:21 AM   #9
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On "with respect to ease of moving funds".....after the recession I wanted to move a large amount from one of the local banks I was using and they seriously said NO! After getting my blood pressure stabilized, I withdrew every penny and deposited some choice comments. I'm slowly moving towards all VG, Fid accounts but still check bank ratings for cd.
Why did they say no?
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Old 06-01-2018, 10:58 AM   #10
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Selling them on the secondary market at a discount plus fees is the penalty.
Yahbut: The discount and fees to sell a T-bill prior to maturity are small compared to the hit you'll take selling a used CD prior to maturity. Ask the bond guys at Fidwab if you don't believe this.

Re buying via TreasuryDirect, I don't see the attraction. I can buy t-bills at Schwab on the auction for zero fee unless I talk to a human, then I sometimes pay $25. Presumably Fido is similar. Why move money around to use TreasuryDirect?
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Old 06-01-2018, 01:36 PM   #11
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Yahbut: The discount and fees to sell a T-bill prior to maturity are small compared to the hit you'll take selling a used CD prior to maturity. Ask the bond guys at Fidwab if you don't believe this.

Re buying via TreasuryDirect, I don't see the attraction. I can buy t-bills at Schwab on the auction for zero fee unless I talk to a human, then I sometimes pay $25. Presumably Fido is similar. Why move money around to use TreasuryDirect?
I am generally happy to get my CDs at retail banks so that I have the option of early withdrawal. Bonds I buy at Schwab. I see no reason to mess with Treasury Direct unless you want to own I bonds.
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Old 06-01-2018, 01:41 PM   #12
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Yahbut: The discount and fees to sell a T-bill prior to maturity are small compared to the hit you'll take selling a used CD prior to maturity. Ask the bond guys at Fidwab if you don't believe this.

Re buying via TreasuryDirect, I don't see the attraction. I can buy t-bills at Schwab on the auction for zero fee unless I talk to a human, then I sometimes pay $25. Presumably Fido is similar. Why move money around to use TreasuryDirect?
He was comparing to early withdrawal penalties on CDs bought directly from banks, not CDs sold on the secondary market.
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Old 06-02-2018, 09:32 AM   #13
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Selling them on the secondary market at a discount plus fees is the penalty.
Yes. I bought some 1 month bills in the 2ndary market and was really surprised how good the pricing was on small lots of them. My discount broker, interactive brokers, charges a surprisingly large commission on them though. It was not a deal stopper but enough to send me to Treasury Direct instead.
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Old 06-02-2018, 09:36 AM   #14
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I don't think my broker, interactive brokers, lets customers buy at the auction for no fees. Because I was buying 1 month at a time, their commission to roll it every month was a little too expensive for me. I'd rather not move the money around if I had a Schwab account...
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Yahbut: The discount and fees to sell a T-bill prior to maturity are small compared to the hit you'll take selling a used CD prior to maturity. Ask the bond guys at Fidwab if you don't believe this.

Re buying via TreasuryDirect, I don't see the attraction. I can buy t-bills at Schwab on the auction for zero fee unless I talk to a human, then I sometimes pay $25. Presumably Fido is similar. Why move money around to use TreasuryDirect?
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