How your Credit Union Deposits are Protected
Roswell Community FCU sometimes receives inquiries from its members about its financial health and if members’ deposits are insured. The deposits of Credit Union members are insured through a program backed by the United States government that some of our members may not be aware of, but it’s important to understand how the program operates and the protection it provides.
How Roswell Community FCU members’ deposits are insured
The basic insured amount for a credit union member under current federal law is $250,000.
The deposits of Roswell Community FCU members are insured by the National Credit Union Administration (NCUA) and its National Credit Union Share Insurance Fund (NCUSIF).
The NCUA is an independent agency of the United States government. NCUA insurance helps to maintain sound conditions in the credit union industry and protects credit union members if an insured credit union fails due to insolvency or bankruptcy, a status which is determined by the National Credit Union Administration Board.
Details on the insurance coverage for credit union members provided by the National Credit Union Share Insurance Fund are available the Fund’s website. A comprehensive booklet entitled Your Insured Funds is available on the ncua.gov and MyCreditUnion.gov websites. This booklet contains a detailed discussion of all available types of NCUSIF coverage
According to the NCUA, “The Share Insurance Fund has the backing of the full faith and credit of the United States. Credit union members have never lost even a penny of insured savings at a federally insured credit union.”
The Share Insurance Fund also separately protects members’ Individual Retirement Account (IRA) and KEOGH retirement accounts up to $250,000 and provides additional coverage for members’ trust accounts.
What if I have more than one credit union account and what if I have cumulative assets greater than $250,000?
Share accounts maintained in different rights, capacities, or form of ownership may each be separately insured up to $250,000. This means that a member may hold or have an interest in more than one separately insured share account in the same insured credit union.
Individual account coverage can be extended beyond the basic $250,000, through a variety of methods, including joint ownership, naming a payable-on-death beneficiary, or the creation of legal trusts.
In terms of insured amounts, it may not be necessary to separate and diversify assets between different financial institutions, and it may be more efficient to consolidate funds among just a few (or only one) credit unions or banks.