Let me add mine:

There are 4 Things YOUR Bank Doesn't Want You To Know

1) Your Bank Is loaning Your money out to investors and charging them an Interest fee of 5-6%.
Of course this rate may vary but it doesn't even matter in the big scheme of things. There are certain investors who are reinvesting this same money and receiving 1-1.5 percent interest a DAY. Yes I said "A DAY", which amounts to over 30% PER MONTH. Now let's say the reinvest $10,000. Each day they are earning $100-$150 a day in interest seven days a week. Most people could quit their job on that money alone. Even at the lower 1% they make $3,000 on their $ 10,000 in 30 days. In 3 months their initial investment is doubled.

2) Your Bank offers lower lending rates to these investors because these same investors are taking a percent of the Bank's money and quietly investing it for these very same banks. Well, actually it's not the banks money it's yours. I really have to watch myself here because these are very serious people who I really don't want as my enemies although it's probably a little too late for that.

3) Your bank goes out if it's way to find excuses to make you open a Savings account to attach to your checking account. Their favorite pitch is to "protect you from over-draft fees" by adding a savings account to your existing checking account. Checking accounts fluctuate because we use them to pay our bills and attach credit or debit cards to them. Savings account funds pretty much just sit there earning a ridiculously low interest which makes it available for YOUR bank to play monopoly with your money and in return give you a couple of hundred dollars a YEAR if your lucky. Are you starting to get the picture?

4) Your bank and it's investors are not only capitalizing on the insane interest their earning but they are earning free advertising while their money is sitting in these accounts. That's right, free advertising for their business or their Internet website. It's crazy, yet it's true.

I just KNOW someone here is going to show up and recommend a credit union. My good friend has been pressuring me to join Verity for months, and I've been resisting, mostly because... well, I just feel resistant. But I suppose that they are NCUA-insured - is that as safe as FDIC-insured?

Xiu Lu, you are right on about those CD's which pay higher interest rates. More risk = higher expected return.

Are you aware the FDIC has recently hired and un-retired numerous auditors expecting many banks to go under in the coming year?

Also, FDIC insurance does cover deposits up to $100,000 in savings accounts - not money markets! And, yes, they cover up to that amount, but, in the event of a large number of banks going under, will not pay it back all at once or quickly. They'll pay it back slowly and in small installments.

Almost all banks and Credit Unions are up to their eyeballs in toxic paper - mortgage bonds that may very well turn out worthless. That's the main way they generate, or are supposed to generate, profits to pay interest on deposits. No institution is immune to the mess.

Keep inflation in mind as well. Government figures are faulty to say the least. One trip to the grocery store and gas station will tell you that. I fully expect inflation to be running over 10% within 12 months of NOW - and that's what official government figures will say. That's how much your dollars will erode in earning power each year.

It's a very tough environment out there. Be careful.

The real issue is why the FDIC examiners didn't rescind FDIC coverage for banks like Countrywide that offered -10% down-payment mortgages. The taxpayers (of China) should not be funding yet another Ponzi scheme.

Sam acts as if this the way banks operate is some kind of secret that they don't want anyone to know about. If it's a secret, it is very poorly kept. The problem is that many Americans border on financial illiteracy. Many don't understand how compound interest works and many more do not know that making a 'spread' on money is the second oldest profession in history.

In the most simplistic terms, all financial institutions borrow short and lend long. They take your money and give you a short term interest rate (CD or savings account) and immediately lend the money out longer term at higher rates (car loans, mortgages etc.). The difference is between the two is the banker's profits. As long as the bank makes prudent loans with stringent guidelines (no interest only loans, all loans documented etc.), the system functions fairly well. Banks have always needed short term financing to be rolled over- deposits or credit must be replaced to keep the bank capitalized. In reality, the depositor has always assumed the risks right along with the bank. This is why there is FDIC because after the Depression people were afraid to put their money in banks and without depositors banks cannot make money.

So this is not a conspiracy. The US operates on what is called a 'fractional reserve system'. Banks must have only 10% or so of cash on hand at any given time- the rest is being put to work making the bank money. If there is a run on the bank, all your money isn't there and it never has been. The problem today is that insatiable greed and political corruption allowed the banks to run amok. With the help of Wall St, the Federal Reserve (which is really a private bank)and the federal government, the financial industry created the largest debt bubble in history and now we will all pay the price.