Monday, November 12, 2007

Warning: Etrade

A good number of people use E-Trade for banking services as well as their brokerage. The bad news is there is a high probability that E-Trade is heading for bankruptcy and their banking deposits over the $100,000 FDIC limit are not safe.

"Citi Investment Research analyst Prashant Bhatia cut E-Trade's rating to "Sell" from "Hold." Bhatia said there is a 15 percent chance E-Trade will have to declare bankruptcy".

I would urge that investors take immediate steps to transfer bank deposit assets out of E-Trade that are above the $100,000 limit. Also keep in mind that money kept in money market accounts at E-Trade that are not backed by FDIC insurance may not be secure.

Out of the Gate: E-Trade Financial Falls

"Half of deposit accounts, representing about $15 billion, are higher than the Federal Deposit Insurance Corp.'s $100,000 threshold."