Last July I compared bank failures in 2008 to bank failures during the S&L Crisis in the late 1980s. At the time, Indymac has just failed and many hoped the banking system would stabilize. Then came Fannie, Freddie, Lehman, AIG, WaMu, Wachovia, Citi, Merrill...

The data now shows that the financial crisis far exceeds anything that occurred in the 1980s.

While there have only been 24 failures so far, they have accounted for $341,000,000,000 in assets, far above the $164,000,000,000 in assets for failed banks in 1989. Consolidation has played a big part of this. There are 50% fewer banks today than there were 10 years ago. By any measure, this banking crisis is much more massive than what happened in the late 1980s.

This credit crisis has also impacted the biggest of the financial institutions. Many of the biggest banks took enormous gambles on mortgage related securities and held assets that turned toxic once the mortgage market turned down. When the best turned bad, these toxic assets dwarfed their capital, leading to rating downgrades, which led to investor and depositor flight, which led to insolvency. Leverage can create enormous gains in good times but it can also result in staggering losses in bad times. Big banks, which previously seemed like pillars of stability in bad times were swept away.

A look at the charts shows that in the 1980s, bank failures did not spike in one year and then come back down, but rather remained elevated for an extended period from 1988 - 1993. It's possible that the TARP will prevent further bank failures but don't count on it. Treasury Secretary Paulson said that the TARP was not meant to rescue every bank. With real estate values continuing to fall, I imagine we'll see the FDIC setting up more shotgun bank marriages a la WaMU/Chase and Wachovia/Wells Fargo in 2009. Who the government will let live and who will be allowed to go under will be an interesting policy question for the new administration.

This data was taken from the FDIC's failed bank list. The list includes Washington Mutual, which was purchased in distress by JP Morgan Chase. But it does not include Wachovia, purchased under similar circumstances by Wells Fargo or Countrywide, acquired by Bank of America.. It also doesn't include Citigroup, which would have failed were it not bailed out by the government or any of the non- FDIC regulated financial companies that were bailed out, that failed, or were purchased in distressed condition - Fannie Mae, Freddie Mac, AIG, Lehman, Bear Stearns, Merrill Lynch. Even without the inclusion of these institutions, it's clear that 2008 will be a year that the banking world will be happy to put behind.

The Fed cut its Fed Funds rate to 0-.25% yesterday but there are still some very attractive savings and CD rates. Get them before they are gone.

These rates include:

• DollarSavingsDirect is offering a 4% APY Savings account with no minimum deposit.

• EverBank is offering a checking account with a guaranteed 3 month bonus rate of 4% APY and a first year APY of 3.42%. In addition, BestCashCow readers receive $40 when they open the account using this link and fund the account with $40,000 or more. In one sense, the 3 month bonus is like a liquid 3 month CD. At 4% APY it would be the highest rate by over 70 basis points. Another bonus of Everbank, they were one of only a handful of banks that actually saw their Bauer rating for financial stability and solvency increase over the last quarter. Everbank has told us that the rate will only last through the year. They will be lowering rates in January.

• A five year CD from Chase/WaMu paying 5% APY.

There are many other savings, money market, and CD accounts that are paying well above the national averages.

Rates are falling and banks have indicated to us that they will fall further over upcoming days and weeks. But as chart below shows, savings and CD rates have held up incredibly well despite several rounds of Fed rate cuts. Why? Because there is competition for your money and banks needs your deposits to fund their operations and stay solvent.

We expect rates to fall but if this trend holds anticipate top savings, money market and CD rates will not approach 0%, but rather come down to the 3-4% range. Still, if you have money that you want to invest in an FDIC insured account, now is a good time to look into opening an account.

• View the top CD Rates
• View the top money market and savings account rates.

Money market funds that invest the bulk of their cash in treasury bills may provide a negative return to investors if the Fed cuts rates any further. Low Fed Funds Rates combined with a rush to own the safety and security of treasury bills have pushed the yield on T-bills down to 0%. Money market funds that invest in Treasury Bills therefore receive a 0% return, or a very low return from their investment. Once the expenses of running the money market are factored in, the actual return of the fund will be less than 0%.

A Bloomberg article on this says:

'Record-low yields on government debt have already led money-market funds to waive fees to keep returns positive. If the Federal Open Markets Committee, as expected, cuts its target rate, some Treasury funds may allow returns to turn negative, said Peter Crane, president of Crane Data LLC, a money-fund research firm in Westborough, Massachusetts.

“No one has ever paid above and beyond their interest income to be in a fund,” Crane said. “But if we see another cut, we’ll likely see negative yields."'

If returns turn negative, Crane believes that the funds will cover the shortfall by charging customers in the form of monthly fees. The end results would be a negative return for investors. This is different from a money market fund breaking the buck. When a fund breaks the buck, the value of its assets fall, wiping out some of the principal of the money market. That is what happened to the Reserve Primary Fund (RFIXX) when it lost considerable money due the bankruptcy of Lehman Bros.

Remember, this would only happen to money market fund that invest primarily in US Treasuries. The BestCashCow Money Market Fund Rate Table lists several funds that are far above 0%, the highest paying 2.57%. This is a far cry from September when the collapse of Lehman froze the money markets and drove yields up to the 4-5% range.

The question is how long will Treasuries stay below 0%. Even if the Fed drops the Fed Funds rate to 0%, some believe that Treasury yields will still rise. Bill Gross, manager of the world's biggest bond fund had this to say on Bloomberg TV:

"“Treasuries have some bubble characteristics, certainly the Treasury bill does. A Treasury bill at zero percent is overvalued. Who could argue with that in terms of the return relative to the risk? There is no return.”

After bank deposit accounts and treasuries, money market funds are considered the safest and most liquid places to store money. Despite being safer than money market funds, bank savings and money market accounts pay far more interest. For example the top savings account on the BestCashCow rate table pays 4.00% APY why the top money market fund pays 2.57%.

Money market funds, which are not FDIC insured should be not confused with money market accounts, which are.