The National Credit Union Administration (NCUA) is an independent agency of the United States Government. NCUA regulates, charters, and insures the nation’s credit unions.
The shares in your credit union are insured by the National Credit Union Share Insurance Fund (NCUSIF) or the Fund, an arm of NCUA. Established by Congress in 1970 to insure member share accounts at federally insured credit unions. Your share insurance is similar to the deposit insurance protection offered by the Federal Deposit Insurance Corporation (FDIC).
Here is an important fact to remember about your share account:
Not one penny of insured savings has ever been lost by a member of a federally insured credit union. The federal insurance fund has several programs to help insured credit unions which may be experiencing problems, and liquidations or failures that are usually done only as 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 2 days from the time the credit union closes its doors.
Properly established share accounts in federally insured credit unions are insured up to $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 up to $250,000. There are exceptions, though. You may obtain additional insurance coverage on multiple accounts, but only if you have different ownership 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 IRA Account at the same credit union, each account is insured up to $250,000. However, if you have a regular share account, share certificate account and share draft account, all in you name, you will not have additional coverage. Those accounts will be added together and insured up to $250,000 as your individual account.
Education and Roth IRAs: These are two types of insured member accounts. Education IRAs are insured as irrevocable trust accounts and will be added to a member’s other irrevocable trust accounts and insured up to $250,000.
Recent Changes (April 1999): Additional coverage is available on revocable trust or payable on death accounts. 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 $250,000.