 | Newton Male
is Chairman of the Board of Prairie State Bank of Augusta, KS, with 12 branches in the Wichita area, a position he has held since 1983. He also currently serves as a Director for Western National Bank of Lenexa, KS and the First National Bank of Medicine Lodge, KS and Overland Park, KS. Previous positions held include two terms as Kansas State Bank Commissioner, President of Prairie State Bank, and Assistant Examiner for FDIC. Professional and community involvement comes second nature to Newton. Currently he is on Federal Affairs Committee of the Kansas Bankers Association, Director of Augusta Progress, Inc., and a member of the Augusta Historical Society and the Augusta Chamber of Commerce. In the past he has been very active with the Wichita Area Girl Scouts, Augusta School Board, Mayor of Augusta, Kansas House of Representatives, various positions with the Kansas Bankers Association, American Bankers Association, Butler County Community College Endowment Association, as well as Director positions with several other area banks. Newton has also done extensive work in Russia teaching Russian bankers how to deal with their banking crisis. This endeavor was sanctioned and performed in tandem with the Financial Services Volunteer Corps of New York and the US Agency for International Development. Newton can be contacted at the Prairie State Bank, 512 State Street, Augusta, KS 67010, by phone at (316) 775-5434, by fax at (316) 775-1790, or by e-mail at nmale@prairiestatebank.co |
Banking & Finance
2001-11-01 14:40:00
Cds or annuities
Question: I am interested in the safety of investments. Which is safer…a CD at a bank or an annuity with an 'A' or higher rated life insurance company?
Answer: Asking the question, which is safer:(1) a CD at a bank, or (2) an annuity with an 'A' or higher rated life insurance company is like asking which is safer, a concrete storm shelter or a steel storm shelter. A certificate or annuity provides certain assurances. As you no doubt know, money in a certificate of deposit at an insured bank is protected by the Federal Deposit Insurance Corporation up to $100,000 per depositor. You should check with your bank if your certificate of deposit exceeds $100,000 in order to make certain your funds are insured or to learn ways to provide additional safety in the event the certificate exceeds $100,000. In recent years, banks have been permitted a new method for providing safety for it's depositors on large deposits. These methods are through letters of credit issued by the Federal Home Loan Bank or surety bonds issued by insurance companies in the business of providing insurance to banks. Placing money in an annuity with a life insurance company which has an 'A' or higher rating provides a great deal of safety also. Insurance companies reinsure in order to spread the risk and are closely regulated by the insurance commissioner of each state in the United States. Probably an overshadowing question would be, "What do you want the money to do for you?" Annuities are designed to be the scientific and methodical distribution and liquidation of money over the life of an annuitant. While in many respects it has a few things in common with a certificate of deposit, it is usually used for other reasons than the goals of the owner purchasing a certificate of deposit. Both the CD and life insurance annuity have advantages in certain areas over each other, and it would be best to discuss the pros and cons of each with a reputable banker or licensed insurance agent.
