Dear Dr. Don,
I’m thinking about opening a CD account at a local credit union. The CD is insured by the National Credit Union Administration, or NCUA. While I know a lot about bank-insured FDIC accounts, I do not know much or hear much about the NCUA. Will my deposit at this credit union be as safe as the one at a bank?
— Michael Misgivings

Dear Michael,
Great question. Everyone knows about bank insurance through the Federal Deposit Insurance Corp. However, the NCUA’s National Credit Union Share Insurance Fund, or NCUSIF, is less well-known. Because credit unions are owned by their depositors, the deposits are called shares, and deposit insurance is called share insurance.

NCUSIF-insured products are backed by the full faith and credit of the U.S. government, just like FDIC-insured products. The limits on the share insurance are the same as the limits on FDIC insurance, currently $250,000 per individual account holder.

I wouldn’t have any second thoughts about choosing NCUSIF-insured shares. You shouldn’t either. Besides, credit unions often offer higher interest rates than banks.

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