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I don’t care about bank ratings

I’ve been asked by readers a few times if I ever look at “bank health” or ratings. I don’t. I don’t because of FDIC insurance and how it covers me up to $250,000 (and oftentimes more).

My blogging friend Jonathan echoes that sentiment and in his post he shares that those bank ratings are not that useful anyway. “Most of Silicon Valley Bank’s deposits were from start-up businesses, but individual households had accounts with them as well. I don’t mean to pick on DepositAccounts, but they are a respected site and they gave Silicon Valley Bank a Health Grade of A. This is why I don’t care about health grades for banks from anyone. As a depositor, either they have FDIC insurance, or they don’t. Big name banks can fail even if their assets are greater than their deposits.”

I agree 100%. It’s FDIC insurance that matters.

Too Many Employees Cash Out Their 401(k)s When Leaving a Job [Harvard Business Review] – “According to research of over 160,000 U.S. employees from 2014-2016, 41.4% cashed out at least part of their 401(k)s when leaving a job — and 85% of those drained their balance entirely. Why does this occur at this moment in particular, despite evidence that it can damage your ability to retire and despite warnings from experts that it’s a bad idea? The answer is a combination of bureaucracy and psychology — how cashing out is explained to employees (or automatically occurs if balances are low), and how contributions (particularly if they come largely from the employer) are seen as a source of ready cash.” Don’t cash it out!

What’s Your #1 Travel Tip? [Cup of Jo] – “When choosing a hotel, I go to TripAdvisor and, instead of looking at the hotel’s professional photos, look at the travelers’ photos. That way, you can get a real sense of the place. Does the pool look crowded? Are lots of kids at the restaurant? Do the rooms feel dark?” (read the comments!)