Are we better off with accounts at smaller banks?
It seems like they've been less likely to be affected by this sub-prime fallout.
Answers
4107 points
MNSL answered 2 years ago …
I think so. There are best managed small and medium-sized banks worldwide.
Some are not affected by subprime crisis at all. Now .their deposits are increasing rapidly .In addition their market share will increase in the future. Further they have loyal customers.
Some local and regional banks are not as vulnerable as foreign banks now.
2083 points
alanj answered 2 years ago …
If you're concerned about the security of your funds don't be. All FDIC banks are now insured to $250,000 because of the recently passed rescue bill signed into law. There are ways to increase this amount by the different ways to title your accounts. If you want to have quick access to your funds in case your bank closes you can have some emergency money hidden away in a safe place with easy access. You can also have your funds in more than one bank. But note that so far every bank that has closed during this crisis was only closed for no more than one business day.before opening under new ownership. That's because the government is working with other banks that are ready to move in right after a closing. And the bank that moves in should not be a bank in trouble. And some of the banks that closed was closed because there was a run on the bank which put them over the top so that they could not continue operations. But no depositor lost any money.
It doesn't matter whether the banks are big or small your funds are safe. No one has ever lost a penny from an FDIC insured account. And the FDIC was formed back somewhere close to the year 1933.
457 points
SallyG answered 2 years ago …
I've always preferred dealing with small, local branches, preferably of local banks. The personal factor counts with me; I like knowing my tellers and branch manager. Also, smaller companies don't get as involved in risky derivatives, buying subprime mortgages (though they may initiate the loans and sell them, in which case, if I knew, I'd seriously consider getting out, from an ethical standpoint). I also like a bank that has been around for a long time at a state level.
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