Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
Can someone please tell me if an FDIC insured internet bank is as safe (for a 5 yr CD) as a traditional walk-thru bank in the event of a bank failure. The internet banks appear to offer a higher rate of return on CD's and according to bankrate.com's rating sources, many of them are rated "sound," as well. My concern is that they don't have the backing of a "real" bank and have only been functioning for a very short time. Thank you for any feedback.
Print the post Back To Top
No. of Recommendations: 0
tommiez asks,

Can someone please tell me if an FDIC insured internet bank is as safe (for a 5 yr CD) as a traditional walk-thru bank in the event of a bank failure. The internet banks appear to offer a higher rate of return on CD's and according to bankrate.com's rating sources, many of them are rated "sound," as well. My concern is that they don't have the backing of a "real" bank and have only been functioning for a very short time. Thank you for any feedback.

As long as you are sure that the "Internet bank" is really FDIC-insured and they are not just putting the FDIC logo on their marketing materials, the guarantee is the same. FDIC insurance isn't dependant on the length of time the bank has been in operation.

intercst
Print the post Back To Top
No. of Recommendations: 0
There should not be any problem if it's truly FDIC insured. True internet banks don't have the overhead of traditional banks and thus, higer returns. I have had an internet bank as my ONLY bank for over two years
and as I sit here in New Zealand I find it most convenient to be able to access not only my bank, but my on line broker and the "Motley Fool" group.

Cheers------from a Retired Fool
Print the post Back To Top
Advertisement