How Credit Unions Keep Your Money Secure
What is NCUA?
The National Credit Union Administration (NCUA) is the independent agency that administers the National Credit Union Share Insurance Fund (NCUSIF). Like the FDIC’s Deposit Insurance Fund, the NCUSIF is a federal insurance fund backed by the full faith and credit of the United States government. The NCUSIF insures member savings in federally insured credit unions, which account for about 98 percent of all credit unions in the United States. Deposits at all federal credit unions and the vast majority of state-chartered credit unions are covered by NCUSIF protection.
What is the purpose of NCUSIF?
The NCUSIF protects members’ accounts in federally insured credit unions, in the unlikely event of a credit union failure. The NCUSIF covers the balance of each member’s account, dollar-for-dollar up to the insurance limit, including principal and posted dividends through the date of the failure.
What are the basic NCUA coverage limits? *
Single Ownership Accounts (owned by one person with no beneficiaries): $250,000 per member-owner.
Joint Ownership Accounts (two or more persons with no beneficiaries): $250,000 per owner (with the primary owner a member of the credit union)
IRAs and other certain retirement accounts: $250,000 per member-owner
Revocable trust accounts: Each member-owner is insured up to $250,000 for each eligible beneficiary named or identified in the revocable trust, subject to limitations and requirements.
Irrevocable trust accounts: Each owner (so long as all owners OR all beneficiaries are members of the credit union) is insured up to $250,000 for each beneficiary named or identified in the irrevocable trust, subject to specific limitations and requirements. Coverdell Education Savings Accounts, formerly education IRAs, are insured as irrevocable trust accounts.
A qualifying eligible beneficiary must be a natural person, or a charitable organization or non-profit entity under the Internal Revenue Code.
*These share insurance coverage limits refer to the total of all shares that account owners have at each federally insured credit union. The listing above shows only the most common ownership types that apply to individual and family shares and assumes that all NCUA requirements are met.
Do I have to be a credit union member to be insured at that federally insured credit union?
All primary owners (natural person(s) and non-natural person(s)) on any share account at a federally insured credit union must fall within that credit union’s field of membership and be on record as a member of that credit union. Co-owners on joint accounts with no beneficiaries are provided insurance coverage regardless of whether they are a member. However, co-owners on revocable trust accounts must be members of the credit union for their portion of the funds to be federally insured. Also, all owners on an irrevocable trust account must be members of the credit union OR all the beneficiaries must be members of the credit union for the account to be federally insured. If membership status of a co-owner is unknown, one should inquire with their credit union.
Is it possible to have more than $250,000 at one federally insured credit union and still be fully covered?
You may qualify for more than $250,000 in coverage at one insured credit union if you own share accounts in different ownership categories. The most common account ownership categories for individual and family shares are single-owner accounts, joint accounts, certain retirement accounts, revocable trust accounts, and irrevocable trust accounts.