We all know the economy is in a state of serious crisis. Many economists are calling this one of the most dramatic economic crises that they’ve ever seen. Banks are imploding left and right, and the news just keeps getting scarier and scarier. So if you’re thinking of putting your money into certificates of deposits, you need do a thorough research of the issuing bank to see if they are in good financial standing. One way that investors ascertain the fiscal health of a bank or other financial institution that issues certificates of deposit or CDs, as they are more commonly referred to, is by a CD ratings system. CD ratings tell you about the health of the bank that is issuing them.
When we invest our money in CDs or any other kind of financial product, we are hoping to make a significant profit. At the bare minimum we don’t want to lose any money. So, we need to be extra careful when reviewing our options. With CD ratings, we can get an idea of the health of the bank which is issuing them. By and large, CDs which are issued by American banks are protected by the Federal Deposit Insurance Corporation – the FDIC, for short. The FDIC insures CDs up to a certain amount (currently $250,000, but that will drop to $100,000 in the near future) so that even if the bank issuing your CD is on track to implode, you won’t lose any money. Nevertheless, who wants to put their money into a bank with questionable CD ratings?
Before you invest your money into anything, be sure to consult with a financial advisor. CD Ratings are very helpful in determining the issuing bank’s solvency, but nothing can beat sound advice from an expert.