Safer Than Ever

You're Covered!

Still, in these troubled times it's nice to know that your savings are insured. The passage of the Emergency Economic Stabilization Act on October 3, 2008 increased share insurance protection to $250,000 on all types of accounts until December 31, 2009. 

NCUA has published a brochure you can download entitled How Your Accounts Are Federally Insured (PDF file). This document contains detailed information about savings insurance, including a website link to a calculator to help you determine your total insurance coverage. A brief synopsis of the facts appear below:

The NCUSIF insures member savings in federally insured credit unions, which account for approximately 98 percent of all credit unions. All federal credit unions and the vast majority of state-chartered credit unions (including REAL Financial) are covered by NCUSIF insurance protection.

Credit unions that are insured by NCUSIF must prominently display the official NCUA insurance sign. No credit union may terminate its federal insurance without first notifying its members.

As a member of a federally insured credit union, you do not pay directly for your share insurance protection. Your credit union places a deposit into the NCUSIF and pays an insurance assessment based on the total amount of insured shares and deposits in the credit union. Federally insured credit unions are required to deposit and maintain one percent of their insured shares and deposits in the NCUSIF.

Most share accounts in federally insured credit unions are insured up to the Standard Maximum Share Insurance Amount (SMSIA), $250,000. Generally, if a credit union member has more than one account in the same credit union, those accounts are added together and insured in the aggregate.

There are exceptions. You may obtain additional separate coverage on multiple accounts, but only if you have different ownership interests or rights in different types of accounts and you properly complete account forms and applications. For example, if you have a regular share account and an Individual Retirement Account (IRA) at the same credit union, the regular share account is insured up to $250,000 and the IRA is separately insured up to $250,000. However, if you have a regular share account, a share certificate, and a share draft account, all in your own name, you will not have additional coverage. Those accounts will be added together and insured up to $250,000 as your individual account. Additionally, shares denominated in foreign currencies are insured as outlined in NCUA Rules and Regulations.

Coverdell Education Saving Accounts, formerly education IRAs, are insured as irrevocable trust accounts and will be added to a member’s other irrevocable trust accounts and insured up to the SMSIA. Roth IRAs will be added together with traditional IRAs and insured up to $250,000.

Additional coverage is available on revocable trust or payable on death accounts on a per beneficiary basis. You can now name a parent or sibling as a beneficiary to get separate coverage. Previously, beneficiaries had to be a spouse, child or grandchild. The rules on joint accounts have been simplified. A co-owner’s interest in all joint accounts in the same credit union will be added together and insured up to the SMSIA.

The federal insurance fund has several programs to help insured credit unions which may be experiencing problems. Liquidations or failures are a last resort. If a federally insured credit union does fail; however, the NCUSIF will make any necessary payouts to the credit union’s members. These payouts are usually done within 3 days from the time the credit union closes its doors.

  Federally insured by NCUA  
up to $250,000