So I have a $270 check from a bank in the next town

[sandnsea]

and I bank at a local bank. My bank is rated well, I haven't checked this other bank.

Should I run straight down to the other bank to make sure I get my money, in case they're a risky bank and go belly-up overnight?

Thoughts?

[lapfog_1]

1. Have there been any bank runs in the US yet? - n/t

[BrklynLiberal]

4. WaMu was the victim of a bank run.

WaMu had insufficient liquidity and was in an "unsafe and unsound condition" to carry on, following a bank run that began Sept. 15, with customers withdrawing $16.7 billion in total from their accounts at the bank.

http://www.ottawabusinessjournal.com/292717579775709.php

[JuniperLea]

9. Yep, it was fear that did them in...

There was no good reason for this to happen... scary.

[RoyGBiv]

6. Yes ...

Just not the kind you see in the movies.

The final straw in what happened to WaMu was in effect a run.

[SammyWinstonJack]

2. ...

[nadinbrzezinski]

3. I'd go cash it, but that is just me

[dkofos]

5. If you are that freakin worried you should have cashed it yesterday.

[sandnsea]

7. Yesterday was Sunday n/t

[dkofos]

14. OK 9:00 am this morning.

Happy now

[sandnsea]

16. I didn't know it was an unknown bank

until I just looked at the check and realized I had no idea about the bank's solvency.

[dkofos]

28. So I should give a shit

[lapfog_1]

15. Try to cash it, I'd be interested to hear how it goes...

will they put a hold on the funds or a hold on funds in your bank?

My bank never did that except for personal checks written to me from out of state banks, but then I had about $100K on deposit with them.

Those were the days...

[sandnsea]

37. I just deposited it

I hope there are no problems. I hate to have to worry about every check a client gives me because of the bank. Never thought of it before.

[lapfog_1]

42. Always ask what the hold time is.

It can be as long as 10 business days.

No problem if the originating bank is solvent AND the check originator has money to cover.

I'm been burned before by waiting only 5 days and writing checks based on the "balance" only to find I was bouncing checks all over the place because the hold time hadn't expired.

[sandnsea]

43. There won't be a hold

The only possible problem could be if the bank did fail, but I realize that's highly unlikely. Still, people need to think about what could happens if there isn't enough credit to cover these transactions between banks.

[Venceremos]

8. Locally owned, state banks

are generally the safest.

[sandnsea]

11. It's only got 3 1/2 stars, yikes n/t

[Fresh_Start]

10. does that bank serve an area with lots of foreclosures

and/or layoffs?

If so, cash it. If its a local bank and the local economy is good, not such a worry

[sandnsea]

12. I don't know how many mortgages they wrote

Or what kind of investing they did. And a bank run can hurt just about any bank. Lots of little banks go under all the time. Maybe they'll decide they don't like my bank and not forward the money to me after I make a deposit.

[DeschutesRiver]

13. If you won't miss it if it is gone, you can take your chances; OTOH

if you want to be pro-active and just not take the risk right now, you should go to the other bank and cash it in.

A year ago, I'd say you have plenty of time. Right now? I can't tell, so err on the side of caution, and go get that cash. Protect yourself and your family from getting accidentally caught up in all these shennanigans. No harm in getting the cash straight out from that bank right now, so nothing to lose there.

[sandnsea]

21. Oh this could be my food money

if other clients take a while to pay me. But the bank is 60 miles away so that is a long way to go because I'm worried about the solvency of a bank.

[DeschutesRiver]

34. Dang, that is a tough call, because that is also gas money you are eating up to get there.

Sixty miles sucks, worse if you meant one way, and that is 120 mile RT. And if you have no things you could get accomplished during that trip, besides the check cashing.

You have any food put away or any other money left to buy a bit extra, things that would store well and keep you fed if there was some delay, due to an unexpected bank holiday or ???

Because I don't think we will have a situation where you would never get your money; at worst, depending on what happens and when (and who knows right now), you might have to wait to get that money available to use.

[sandnsea]

36. It would be terrible if banks stopped trusting each other

and people had to look at every check they got to figure out whether the bank was solvent or not.

[flyingfysh]

17. dupe, ignore

accidental dupe

[flyingfysh]

18. your money is insured by the FDIC

You have much less than $100,000, so you are safe.

If FDIC runs out of money, they'll get more from Congress.

[sandnsea]

24. FDIC needs $500 Billion to cover bank runs

And how long will it take to get it? I don't want to be without any money for my basic needs.

[flyingfysh]

19. dupe, ignore

accidental dupe

[flyingfysh]

20. dupe, ignore

accidental dupe

[depakid]

22. Just put it in the bank unless you have other reasons to go

No sense in wasting gas.

[Breeze54]

23. No, not unless it's a Commercial Bank otherwise it's covered by the FDIC...

and you're in the $$ ! ;)

[sandnsea]

26. See #24 n/t

[Breeze54]

31. And the banks have the FDIC INSURANCE... they're covered.

It's the 'flow' of money between banks, that is at issue.

[sandnsea]

32. But FDIC is broke too

Did you notice that? Yes, the flow of money between banks. Will my bank and this other bank trust each other with this $270 check, or will it just sit in limbo until the credit flows which is what covers these transactions in the first place.

[flyingfysh]

33. the government can't let FDIC run out of money

That would cause massive runs on all the banks, and this would look just like the beginning of the Depression.

[sandnsea]

35. So it's okay to bail out FDIC

with $500 billion to keep banks afloat - but not okay to bail out the creditor banks??

[flyingfysh]

44. If you don't bail out FDIC

Then lots of individual depositors (us) lose whatever money they had in the bank. This happened a lot during the Depression.

[Breeze54]

39. Do you have a link to the story that the FDIC is broke too?

:shrug:

FDIC Deposit Insurance Coverage Frequently Asked Questions

http://www.fdic.gov/deposit/deposits/deposit/faqs/index.html#common

Deposits with each FDIC-insured bank are insured separately from any deposits held at another insured bank. If an insured bank has branch offices, the main office and all branch offices are considered one insured bank. A depositor cannot increase insurance coverage by placing deposits at different branches of the same insured bank. Similarly, deposits held with the Internet division of an insured bank are considered the same as funds deposited with the "brick and mortar" part of the bank, even if the Internet division uses a different name. Financial institutions that may be owned by the same holding company, but that are separately chartered, are separately insured. Separately chartered banks have different FDIC Certificate numbers.

[sandnsea]

41. Here

The Federal Deposit Insurance Corp., whose insurance fund has slipped below the minimum target level set by Congress, could be forced to tap tax dollars through a Treasury Department loan if Washington Mutual Inc., the nation's largest thrift, or another struggling rival fails, economists and industry analysts said Tuesday.

http://news.yahoo.com/s/ap/20080916/ap_on_bi_ge/bank_deposits_safety

[Speck Tater]

25. Small and mid-sized banks are reported to be just fine.

It's the monster big banks that grew too big, to fast, that are in trouble over their questionable get-rich-quick "investments".

[sandnsea]

30. 100 Banks are on the Watch List

and this one only has 3 1/2 stars. Small banks fail every single day.

[sandnsea]

38. And here's a credit union failure

Although these can happen despite the current economic problems.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4124973

[flyingfysh]

27. here is how to check out that other bank

Go to bankrate.com, and look up the safe & sound ratings. See http://www.bankrate.com/brm/safesound/ss_home.asp

[sandnsea]

29. Yeah, it's only 31/2 stars

I did go check it, not good, not horrible.

[CoffeeCat]

40. Check the bank rating here...

http://www.bankrate.com/brm/safesound/ss_home.asp

I just posted an OP about bankrate.com