Hold them or fold them ? (2 CD's)

[redduck]

Here's the situation: I have two CD's in Fremont General (FMT). Fremont seems to be on the ropes. Their stock is at $2.77 as of Wednesday, Oct. 31. From what I've been told (and reassured) that my two accounts are insured. One CD is due early Dec., the other is due in Feb. I'm not sure Fremont is going to be around in Feb. If I take my money out of the Feb. CD, it will cost me about $600 in penalties. So, do I sit and wait until the CD (or CDs) become due, or do I just close either one or both out, or do I file insurance claims if/when Fremont folds?

Anyone have any idea if a bank (i.e. Fremont) just goes out of business in this climate, or are they taken over by another bank?

[OAG]

Looked at the site (Googled it) and it says FDIC so you should be safe. If it goes belly up another bank should take it over (if it happens they should go belly up on a Friday afternoon and the FDIC will ship the assets to another institution by Monday morning) and you should then be given and maybe even forced to take the proceeds of the CD's without any penalty. Worst case should be that you will have to wait for the original maturity dates at a new bank. For a source of information on how it works look up NetBank they went a short time ago.

[Achiever51]

Hold onto them. If the bank is FDIC, you're ok. As pointed out, you MIGHT have a slight delay getting a new certificate or you might get them cashed out if the bank is taken over, but you won't lose any of the interest you've earned.

[Texas Proud]

very easy.. hold em...

[redduck]

Somehow, you guys make it seem like a no-brainer (hmmn, maybe I should let my kids handle my finances).

[Texas Proud]

Quote:

Originally Posted by redduck Somehow, you guys make it seem like a no-brainer (hmmn, maybe I should let my kids handle my finances).

Not try to make it sound like it is not a no-brainer... but you have CD insured by the government... who cares what happens to the bank.

In fact, back in the S&L crash, people were throwing money at a S&L that was going to go under and paying out a ridiculous high rate... HOPING that it would stick to the new bank or at least the bank would hang on for long enough to get that high rate for awhile..