The National Credit Union Administration (NCUA) is the federal agency
that administers the National Credit Union Share Insurance Fund (NCUSIF).
The NCUSIF, like the FDIC’s Deposit Insurance Fund, is a federal insurance
fund backed by the full faith and credit of the U.S. Government.
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 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.
Here are some important facts to remember about your share insurance
provided by the NCUSIF:
Not one penny of insured savings has ever been lost by a member of a
federally insured credit union.
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.
Share accounts in federally insured credit unions are insured up to the
Standard Maximum Share Insurance Amount (SMSIA), $250,000 as of October 3,
2008. The Emergency Economic Stabilization Act of 2008 increased the
insurance coverage on all accounts up to $250,000 until December 31, 2009.
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. 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.
You may find the following NCUA links helpful:
