How does NCUA insurance work in a credit union?


  • The NCUA is a government agency that insures deposits with credit unions so that your money is safe in the event the institution closes.
  • An individual account federally insured by the NCUA is secure up to $ 250,000.
  • A federally insured credit union will have an NCUA sign on the website or building.
  • Read the insider’s guide to the best credit unions »

When you open an account at a financial institution, you want to make sure that your money will be safe, regardless of current or future circumstances. With the ongoing coronavirus pandemic, that feeling is even more important. If something unexpected happens – your branch closes, something in your life is affecting your personal finances – you still need a reliable place to save your money.

The Federal Deposit Insurance Corporation, or FDIC, will protect your money even if a bank closes.

Credit unions
Federally insured through the National Credit Union Administration, or NCUA, will also be secure.

What is the NCUA?

The NCUA is a government agency that oversees federal credit unions. The NCUA controls the National Credit Union Share Insurance Fund, or NCUSIF, which is a fund of all participating credit unions. NCUSIF maintains federal credit union accounts and is supported by the government.

According to the NCUA, the NCUSIF insures about 98% of all credit unions in the United States. Therefore, members of credit unions will likely already have NCUSIF-protected accounts.

What does it mean to be “federally insured by the NCUA?” “

On a building or website for a credit union, you can see that it is “federally insured by the NCUA”.

This wording lets you know that the money in your account is in a safe place. With NCUSIF, money in individual or joint accounts is secure even if a credit union closes.

Accounts protected by federal equity insurance include:

Keep in mind that although IRAs are covered, the NCUA does not insure brokerage accounts. Money invested in stocks, bonds or mutual funds is not secure, even if those products come directly from a federally insured credit union. A credit union should inform its members if a specific product is not insured by the federal government, so that you know what is guaranteed by the credit union and what is not.

Why is Federal Equity Insurance Important?

Federal equity insurance is crucial because it ensures that the money in your account is protected no matter what. The NCUA regularly reviews the operation of federal credit unions, so they do not close often.

However, if a credit union goes bankrupt, you won’t lose a dime of your money. If your credit union closes, the NCUA will transfer your money to another federally insured credit union.

In the event that he cannot transfer money to another credit union, you will receive a check for the money that was in your account in the mail a few days after the credit union closes. Either way, your money won’t go away if something bad happens.

How much does the NCUA insure?

Federally insured credit unions will have up to $ 250,000 secured in an individual account. If you are part of a joint account, you can have $ 250,000 protected per owner for a total of $ 500,000.

It is possible to have over $ 250,000 safe in a credit union if the accounts fall into separate ownership categories. The property categories are divided into the following groups:

  • Individual owner accounts
  • Joint accounts
  • Traditional IRAs, Roth IRAs and KEOGH accounts
  • Revocable trust accounts
  • Irrevocable trust accounts

Let’s say you have $ 250,000 in an individual account and $ 350,000 in a joint account. If your bank were to close its doors, the $ 600,000 would still be insured by the federal government.

If you prefer to have all of your money in one property category, you can also choose to deposit your money in more than one credit union.

For example, you might have a savings account of $ 250,000 at one credit union and $ 250,000 in a CD at another credit union. Your two accounts would still be insured by the federal government.

How do I know if my credit union is federally insured?

Federally insured credit unions by the NCUA will have a sign at each branch near the cashiers. If you are visiting the website, the sign will usually be at the bottom of the home page.

The NCUA maintains a database of federally insured credit unions. If you look up the address, credit union name, or charter number in this database, you can check to see if it’s federally insured.

You can also use the NCUA Equity Insurance Estimator if you want to know how the equity insurance rules apply based on your situation.

About Wanda Reilly

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