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Dear Dr. Don,
Is an account at a federally insured credit union just as safe and secure as an account at an insured bank?
-- Michael Money
Dear Michael,
The National Credit Union Share Insurance Fund,
or NCUSIF, insures shares at credit unions at
a limit of $100,000 for the standard maximum share
insurance amount.
"Shares" at a credit union are the same thing as "deposits" at a bank. This is because at a credit union,
the account holder is a part owner -- or shareholder -- of the financial institution.
NCUSIF-insured funds get the same
protection as bank deposits insured by the Federal
Deposit Insurance Corp. Like FDIC-insured deposits,
NCUSIF-insured shares are backed by the full faith
and credit of the U.S. government.
There hasn't been as much discussion
concerning what this backing actually means for
credit unions as there has been in the banking
industry, but I address this in an earlier column,
"U.S.
government stands behind deposits."
How do you know if your credit union
provides NCUSIF insurance? The National Credit
Union Administration publication "Share
Insurance" states the following:
Credit unions that are insured by the NCUSIF must display in their offices the official NCUA insurance
sign which appears on the cover of this brochure. All federal credit unions must be insured by NCUA, and no credit union may
terminate its federal insurance without first notifying its members.
Like FDIC insurance, NCUSIF insurance considers joint accounts separately from individually held accounts. Trust
accounts are treated as separate accounts as well. Certain retirement accounts qualify for $250,000 in NCUSIF coverage over and
above the standard maximum share insurance amount coverage on individual accounts.
The National Credit Union Administration
has a "NCUA
Share Insurance Estimator" on its Web site
that will help you determine if your shares are
fully insured.
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