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by Eric Kramer

You may have seen the recent developments on TV with GMAC, and some other banks which have just completely been burned from the economy. The situation with loans being o n hold has also hit automakers pockets too. Th whole thing has been a chain reaction. So what about those that are highest on the rung, namely banks?

How do you know when a bank is going down and when it is performing well might be a better question. Usually banks that you find holding out tempting offers, and higher interest rates than normal is a tall tale sign that something bad is happening.

You might think about the last bank you saw offering higher CD rates than normal, or money market accounts which are well above what the average is. The strategy with these banks is to grow the customer base as large as possible in hopes that when the economy does get better, that they will be able to recover with their own investments.

just as a lot of individual investors, banks buy lots of stock as well as large stakes in other business ventures with the hope of a nice return. When those returns dry up then they are in as much trouble as the individual investor.

There are some banks that appear to be doing well though, and most of these are banks that are buying out the smaller ones. One of the banks that has a lot of assets which can afford to weather things out is Bank Of America. Banks like this have a solid track record, and have also spread out their portfolio for financially rough times.

No matter what bank you go with, the FDIC assures they will cover anything that is lost within $250,000 dollars. So if your bank does end up going under, just keep in mind that you should end up being OK.

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