Paul Sanchez
Federally insured credit unions in the US offer a safe place for members to save money. The National Credit Union Administration (NCUA) insures deposits at member credit unions, protecting individual accounts with up to $250,000 of coverage per depositor. The NCUA does not, however, insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities. While federal credit unions are insured by the NCUA, some state-chartered credit unions are insured by private insurers, providing non-federal share insurance coverage that is not backed by the US government.
| Characteristics | Values |
|---|---|
| Type of insurance | Share insurance |
| Insurer | National Credit Union Administration (NCUA) |
| Insured entities | Federally insured credit unions |
| Coverage | Up to $250,000 per individual depositor; up to $500,000 for joint accounts |
| Coverage calculation | Dollar-for-dollar, including principal and posted dividends |
| Insured accounts | Share drafts, regular shares, share certificates, savings and checking accounts |
| Non-insured accounts | Stocks, bonds, mutual funds, life insurance policies, annuities, municipal securities, safe deposit boxes |
| Regulator | NCUA |
| Protection | Backed by the full faith and credit of the US government |
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What You'll Learn
NCUA insurance covers members' accounts
The National Credit Union Administration (NCUA) insures members' accounts at federally insured credit unions. The NCUA was established by Congress in 1970 to provide this insurance, which is similar to the coverage provided by the Federal Deposit Insurance Corporation (FDIC).
The insurance limit for individual accounts is $250,000, and a member's interest in all joint accounts combined is insured up to $250,000. The NCUA also separately protects IRA and KEOGH retirement accounts up to $250,000 and provides additional coverage for members' trust accounts.
It is important to note that the NCUA does not cover losses on insurance policies, investment accounts, or safe deposit boxes and their contents. Members can calculate their coverage using the NCUA's Share Insurance Estimator, which is available on the NCUA's consumer website, MyCreditUnion.gov.
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NCUA does not insure money invested in stocks, bonds, etc
The National Credit Union Administration (NCUA) is a government agency that insures deposits at member credit unions. The NCUA was established by Congress in 1970 to insure member share accounts at federally insured credit unions. The NCUA's share insurance covers members' accounts at each federally insured credit union, dollar-for-dollar, including principal and any posted dividends up to the insurance limit.
The NCUA does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities. This is true even if these investment or insurance products are sold at a federally insured credit union. Credit unions often provide these services to their members through third parties, and the investment and insurance products are not insured by the National Credit Union Share Insurance Fund (NCUSIF).
The NCUSIF covers up to $250,000 of the total balance of individuals' credit union accounts. The fund is administered by the NCUA and is backed by the full faith and credit of the United States government. No one has lost a single penny of insured deposits at a federally insured credit union.
It is important to note that some deposits at state-chartered credit unions are insured by private insurers. These private insurers provide non-federal share insurance coverage of deposits that are not backed by the full faith and credit of the United States government. As such, it is important for members to confirm that their credit union is federally insured.
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Share insurance coverage
The NCUSIF covers individual accounts up to $250,000, and a member's combined interest in all joint accounts is also insured up to $250,000. Additionally, IRA and KEOGH retirement accounts are separately protected up to $250,000. These coverage limits refer to the total of all shares that account owners have at each federally insured credit union. Members can calculate their specific coverage using the NCUA's Share Insurance Estimator, which accounts for different types of ownership, such as individual, joint, payable-on-death, living trusts, and IRAs.
It is important to note that the NCUA does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if these products are sold by a federally insured credit union. Similarly, safe deposit boxes and their contents are not insured, nor are digital assets or cryptocurrencies.
While the NCUA primarily insures federal credit unions, some state-chartered credit unions may also be insured by the NCUA. These state-chartered credit unions are regulated by the state authority where their main office is located. Additionally, some state-chartered credit unions are insured by private insurers, providing non-federal share insurance coverage that is not backed by the full faith and credit of the US government. As a result, members of state-chartered credit unions should confirm their specific insurance coverage by using the NCUA's Credit Union Locator tool.
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State-chartered credit unions
The NCUA insures individual accounts at federally insured credit unions up to $250,000, and a member's interest in all joint accounts is insured up to the same amount. The NCUA's share insurance does not cover assets or accounts issued by any entities other than a federally insured credit union, such as cryptocurrency companies or investment companies. It also does not cover money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if these products are sold at a federally insured credit union.
An applicant seeking to charter a state-chartered credit union must submit its application to the State Supervisory Authority (SSA). If they also want the credit union to be federally insured, they must submit an insurance application to the NCUA, which will review the application and conduct a background and credit review. Federal share insurance approval depends on the applicant obtaining SSA approval of the state charter.
The NCUA has the authority to regulate federally insured, state-chartered credit unions (FISCUs) and does so to protect the credit union system and the safety and soundness of the National Credit Union Share Insurance Fund. The NCUA must regulate all federally insured credit unions to achieve these goals.
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Federally insured credit unions
The NCUSIF provides share insurance coverage to protect members against losses if a federally insured credit union fails. Credit union members are automatically provided with share insurance coverage when they join a federally insured credit union. Each credit union member has at least $250,000 in total coverage for share accounts held at a federally insured credit union. The NCUSIF covers members' accounts, dollar-for-dollar, including principal and any posted dividends through the date of the insured credit union's closing, up to the insurance limit. This coverage also applies to non-member deposits when permitted by law.
It is important to note that the NCUA does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if these investment or insurance products are sold at a federally insured credit union. Additionally, the NCUA does not insure safe deposit boxes or their contents.
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Frequently asked questions
The NCUSIF is a fund established by Congress in 1970 to insure member share accounts at federally insured credit unions. It is similar to the coverage provided by the Federal Deposit Insurance Corporation (FDIC). The NCUSIF insures the accounts of millions of account holders in all federal credit unions and most state-chartered credit unions.
The NCUSIF covers up to $250,000 of the total balance of individuals' credit union accounts. For jointly owned accounts, the NCUSIF insures an additional $250,000 for each account holder. The NCUSIF also separately protects IRA and KEOGH retirement accounts up to $250,000.
The NCUSIF does not cover losses on insurance policies, investment accounts, or safe deposit boxes. It also does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities.
