Stcus: Federally Insured And Safe?

STCU, or Spokane Teachers Credit Union, is a credit union that is federally insured by the NCUA (National Credit Union Administration). This means that STCU members can rest assured that their financial deposits are safe, as the NCUA ensures that savings, checking, certificate, IRA, and trust accounts are federally insured for up to $250,000. The NCUA is an independent agency of the federal government, and its role is similar to that of the FDIC (Federal Deposit Insurance Corporation), which provides insurance for banks.

NCUA insurance at STCU

STCU, or Spokane Teachers Credit Union, is a credit union based in Liberty Lake, Washington. STCU is federally insured by the NCUA (National Credit Union Administration). This means that STCU members know their savings, checking, certificate, IRA, and trust accounts are federally insured up to $250,000. Each account owner's deposits are insured up to $250,000. If you have a joint account, you could insure an additional $250,000, and your partner can insure $250,000, for a total of $500,000. If you have an IRA, it's separately insured up to $250,000. If you have a trust account, it's separately protected for another $250,000.

For example, imagine that Mary has $250,000 in her STCU First5 Savings Account, $20 in her checking account, and $250,000 in her STCU Roth IRA. The savings and IRA accounts are separately insured, so Mary is federally insured by NCUA up to $500,000. However, her $20 in checking is not separately insured, because checking and savings balances are counted together. Next month, however, Mary decides to marry Larry, who has an eight-year-old daughter named Contrary. Mary and Larry open a new joint STCU checking account and deposit $500,000 of Larry's money, and another $250,000 into a new savings account for Contrary. The entire $500,000 in their joint checking account is federally insured, because half is assigned to Mary and half to Larry. In addition, all $250,000 owned by Contrary is also insured.

Accounts you may have at other credit unions do not affect your NCUA insurance coverage at STCU. Your money is automatically insured when deposited at STCU. However, it's a good idea to periodically review the structure of your deposits to ensure that all your funds are adequately insured. While banks and credit unions rarely fail, and regulators have faithfully protected depositors from losses, it's ultimately your responsibility to decide how and where to invest your money. The STCU staff is happy to help you review and determine how to maximize NCUA insurance protection for your money. You can also refer to the NCUA "Your Insured Funds" brochure, which is packed with dozens of examples and rules for structuring your deposits to maximize federal insurance. Or try the NCUA's share insurance estimator ("shares" is credit union talk for money) to run your own calculations and check if your deposits are adequately insured.

Federal insurance protection

Another aspect of federal insurance protection is offered through the Federal Employee Education and Assistance Fund (FEEA), which provides support to federal employees in various forms. One example is the Professional Liability Insurance (PLI) with FEDS Protection, designed specifically for federal employees. This insurance plan helps protect federal employees from various allegations or complaints made against them by Congress, Executive Branch agencies, other countries, employees, or even members of the public. It covers the costs of legal representation and any judgments awarded against the insured, providing worldwide protection. Additionally, federal law requires agencies to reimburse qualified employees for half of the PLI premium, up to a certain amount.

In summary, federal insurance protection offers a safety net for individuals and businesses by insuring deposits, investments, and other assets. It provides reassurance and financial security, knowing that their funds are protected by the federal government. By understanding the specific insurance programs and their coverage limits, individuals can maximise their federal insurance protection and make informed decisions about their finances.

NCUA vs FDIC

STCU or Spokane Teachers Credit Union is a credit union, and credit union members' deposits are insured federally by the National Credit Union Administration (NCUA), an independent branch of the federal government.

NCUA and FDIC (Federal Deposit Insurance Corporation) are two key federal entities that play a pivotal role in ensuring the safety of depositors' funds. However, they cater to different sectors within the financial ecosystem. The NCUA insures deposits at federally insured credit unions, while the FDIC covers bank deposits.

The FDIC is an independent agency of the United States government that protects bank depositors against the loss of their insured deposits. The FDIC's role is critical in the banking sector, offering depositors peace of mind that their funds are secure up to the insured limit, even in the case of a bank failure. The FDIC provides deposit insurance to various types of accounts, including checking accounts, savings accounts, and certificates of deposit (CDs).

The NCUA was created in 1970 to offer protections similar to FDIC insurance, but to credit union members. The NCUA’s credit union locator can confirm which institutions are NCUA-backed. The standard insurance amount is $250,000 per depositor, per financial institution, and for each account ownership category.

Both the NCUA and the FDIC offer government-backed insurance designed to protect depositors against the loss of their funds due to institutional failures. In the unlikely event that something caused your bank or credit union to go out of business, the federal government ensures you will receive the money you’re entitled to from your deposit accounts.

Structuring deposits for maximum federal insurance

Deposits in STCU are insured by the National Credit Union Administration (NCUA). The standard maximum deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. The NCUA insures deposits that a person holds in one insured bank separately from any deposits that the person owns in another separately chartered insured bank. For example, if a person has a certificate of deposit at Bank A and has a certificate of deposit at Bank B, the accounts would each be insured separately up to $250,000. Funds deposited in separate branches of the same insured bank are not separately insured.

The NCUA provides separate insurance coverage for funds deposited in different categories of legal ownership. This means that if you have a single ownership account at an insured bank and a joint ownership account with one or more people at the same bank, you will be insured for up to $250,000 for your single ownership account deposits and also insured separately for your ownership interest up to $250,000 for all of your joint ownership account deposits. Similarly, if you have a single ownership account in one insured bank and another single ownership account in a different insured bank, you will be insured for up to $250,000 for your single account deposits at each insured bank.

If you have two single ownership accounts (such as a checking account and a savings account) and an individual retirement account (IRA) at the same insured bank, then you will be insured up to $250,000 for the combined balance of the funds. You will be separately insured up to $250,000 for the funds in the IRA because IRAs are in a different account ownership category.

Additionally, if you have a more complex trust structure, you may qualify for more than $250,000 in deposit insurance coverage. For example, an owner who identifies a beneficiary as having a life estate interest in a formal revocable trust is entitled to insurance coverage up to $250,000 for that beneficiary. A life estate beneficiary has the right to receive income from the trust or to use trust deposits during their lifetime, and other beneficiaries receive the remaining trust deposits after the life estate beneficiary dies. As of April 1, 2024, the maximum insurance coverage for a trust owner with five or more beneficiaries is $1,250,000 per owner for all trust accounts held at the same bank.

Joint account federal insurance

A joint account is a deposit owned by two or more individuals. Each co-owner of a joint account is insured up to $250,000 for the combined amount of their interests in all joint accounts at the same IDI (usually a bank). This means that a couple with a joint checking account that's insured can receive insurance of up to $500,000 for the same shared account ($250,000 per co-owner).

The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the US government that protects and reimburses your deposits up to a legal limit of $250,000 per account owner if your insured bank fails. This limit is per account holder, not per account. The FDIC covers many common deposit accounts but does not insure investment accounts. Most checking accounts and savings accounts provided by major banks offer standard FDIC insurance.

For a joint account to be insured, all co-owners must have equal rights to withdraw from the account. If the withdrawal rights are unequal, the account will not be insured as a joint account. All co-owners must personally sign the signature card, although the FDIC does recognize electronic signatures.

In the case of STCU, a credit union, accounts are insured by the NCUA (National Credit Union Administration) rather than the FDIC. The NCUA share insurance estimator can be used to check if your deposits are adequately insured.

Frequently asked questions