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28 Sept. 2007. Online bank shut down by the U.S. government. The bank's dirty little secret was excessive level of mortgage defaults. The FDIC only insures up to $100,000. $109 million of Americans money was not insured and is lost. Hope your money is not in this bank. Who will be next to go? Are you sure your bank is safe or does it have dirty little secrets of it's own.

http://news.yahoo.com/s/ap/20070928/ap_on_bi_ge/netbank_closure_9

2007-09-29 14:41:41 · 7 answers · asked by Mike 2 in News & Events Current Events

Even if you think you money is safe "today". Shouldn't news like this send up a "red flag" that something is terribly wrong with the economy. Maybe this is just the beginning.

2007-09-29 15:20:22 · update #1

7 answers

No. Historically, when banks fail, the USA government declares default so the insurance will only be paid at first. The last time the US government defaulted in the 1930s, all foreign claims were paid off but domestic ones were not (thanks FDR).

2007-09-29 18:14:51 · answer #1 · answered by Caninelegion 7 · 0 0

Ya, it was my bank.

It was sold to ING Direct, and the service didn't miss a beat. Nor was any of my money lost.

If you have over $100,000 in a single account, it is not insured. If you have over $100,000 in a cash account, you really need to talk to a financial advisor, because you don't know how to handle your money.

With all banks, they have to have money coming in and money going out. The money coming in is your checking, savings and CD accounts. The money going out is for loans.

All banks are required to have a certain percentage going in, to have a certain percentage going out.

When they fail to do that, they get penalized, and then closed and sold.

Banks are there to be profitable, and since the real estate slowdown, loans aren't being given out as much. All banks now are trying to win new customers with free checking and many other perks.

Smaller groups like Netbank might fizzle out, and there are also a huge network of small local banks that aren't Bank of America or ING. It's a pretty flexible network of large and small banks and I think they flex depending on how the economy is doing.

I made a good chunk of $ from Netbank and am sad to see a startup go like that.

2007-09-29 21:55:25 · answer #2 · answered by Anonymous · 0 0

ING didn't save anybody as the news headlines say. ING just took the insured money to save theirself. Lots of ING customers are been taking their money out since they rates decreased, and I'm sure lots more will take the money out with this Netbank thing. Do you think Netbank customers will keep their money at ING after all?
If you try to cash your money it regularly takes more than a week if the amount is over $10,000, have you think how long it will take to cash it when problems arise? It would be too late probably. So keep your cash reserve is my advise.

2007-10-03 12:19:12 · answer #3 · answered by fico f 1 · 0 0

I don't really trust banks that much, I try to keep my money as close as possible, but I'm also resentful that the Federal Reserve is hurting the economy.

2007-09-29 21:50:02 · answer #4 · answered by tarzanmanofthejungle 1 · 0 0

interesting! Missed that in the news. Since excessive deregulation traditional banks are bit weak. Anyone that trust on-line bank also deserves what they say about fools.

2007-09-29 21:54:18 · answer #5 · answered by Mister2-15-2 7 · 0 0

sure it,s save, I'm not called "DIGGY-DOG" for nothing.

2007-09-29 21:53:52 · answer #6 · answered by boofuswoolie 7 · 0 0

buy gold.

2007-09-29 23:40:20 · answer #7 · answered by Anonymous · 0 0

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