Don't Count on The "Safe & Sound" Rating of Bankrate.com

[Extend a Hand]

Mish points out that
First Heritage had a 3 star rating right before they were taken over by the FDIC

Bankrate.com evaluates the financial condition of institutions and assigns a 1-to-5 rating with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or better stars with the majority of banks falling into the three to four-star range.

An institution with an "NR" rating may be too new to rate. The "NR" is not any indication of financial strength or weakness. The Safe & Sound Rating is believed to be reliable but the information is not guaranteed. In addition, events since the information was collected may have altered an institution's financial condition.

Nothing Against Bankrate

I have nothing against Bankrate per se. They provide a free service which means you get what you pay for. I am also confident that any bank they rate as unsound, is indeed unsound. In that regard, Bankrate may provide some service. However, the failure of Bankrate to catch the above failure is a big warning sign that no matter what the "Safe & Sound" rating is, do not keep any money, anywhere above the FDIC limit.

If you must do it for some reason (corporate payroll for example), at least pick a bank the Fed and the FDIC will defend at any and all costs. Right now that means Bank of America (BAC), JPMorgan (JPM), or Citigroup (C).

http://globaleconomicanalysis.blogspot.com/2008/07/dont-count-on-safe-sound-rating-of.html