What Members Should Know
Keeping your hard-earned money safe and secure doesn’t have to be difficult. Banking at a trustworthy financial institution is very important to ensure your funds are protected and readily available when you need them. Before opening an account with a credit union or bank, it’s important to confirm it is federally insured or privately insured. In this blog, we’ll discuss how safe and secure credit unions are and how to determine if they are insured.
Are Credit Unions FDIC Insured?
No, the Federal Deposit Insurance Corporation (FDIC) does not insure credit unions because that coverage only applies to banks. Credit unions have their own federal insurance provided by the National Credit Union Administration (NCUA). Similarly to the FDIC, the NCUA protects member’s deposited funds. When reviewing financial institutions, check that they are insured by the FDIC or by the NCUA. This will give you peace of mind knowing your funds are insured should something happen to the institution.
What Is NCUA Insurance and How Does It Protect Credit Union Members?
The NCUA protects consumers from losing their deposited funds should the credit union fail. It covers up to $250,000 per depositor for single, joint and retirement accounts. This protection automatically covers the deposit account as long as the credit union is NCUA insured. Before becoming a member of a credit union, check for the NCUA logo or ask a representative if the credit union is part of the NCUA.
Are Credit Unions Safer Than Banks?
When it comes to the safety of your funds, it all depends on the financial institution, account type, insurance coverage and how the account is titled. A credit union can be a safe and local choice as long as it is insured by the NCUA. That said, a bank can be an equally safe place for your money if the FDIC insures it. The only difference is that insurance is handled by separate agencies.
Credit Union vs. Bank: What Is the Difference in Account Protection?
Account protection at credit unions and banks is similar in that the funds in deposit accounts are protected, but this protection does not extend to investment accounts. Investment accounts are not included because they involve some type of risk. These accounts include stocks, bonds, mutual funds, crypto assets and life insurance products.
What Types of Credit Union Accounts Are Usually Covered?
The NCUA insures the funds of deposit accounts categorized as checking accounts, savings accounts, share certificates, individual retirement accounts and trust accounts. The coverage is up to $250,000 per account. According to Bankrate.com, the NCUA covers accounts with one owner up to $250,000 and joint accounts up to $250,000 per owner as long as the primary owner is a credit union member. Some credit unions offer physical safe deposit boxes where members can store their money and valuables, but the contents are not insured by the NCUA.
How Do You Know if a Credit Union Is Federally Insured?
All federal credit unions are insured by the NCUA. According to Bankrate.com, some state charter credit unions sometimes opt for private insurance. To identify NCUA coverage, look for signs posted at branches or the NCUA logo on the credit union’s website. Additionally, you can visit the NCUA's website to find NCUA-backed credit unions near you.
When Should You Pay Closer Attention to Insurance Limits?
You should always know the balances of your deposit accounts to know if you’re approaching the limits for NCUA coverage. If this happens, you can consider adding a joint owner, establishing a trust or moving funds into a new account or across multiple financial institutions. Using the NCUA.gov calculator to estimate your coverage can help you plan better for these changes. If you have concerns, you can visit the NCUA.gov website for more information or check with your credit union.
Practical Safety Tips for Credit Union Members
There are things you can do as a credit union member to keep your funds and accounts safe. First, use online and mobile banking services as much as possible. Digital banking makes accessing your account fast, easy and convenient wherever you are. Many online systems let you turn on fraud alerts and transaction notices, so you’ll receive texts or emails about any account activity.
Updating your contact information when it changes is another good practice so that your credit union can reach you quickly if needed. Also, review your account activity online daily and your monthly statements. Also, visit your credit union website to see what it is doing to protect you and your financial information from scams and frauds.
How TCU Can Help
Looking for a safe and insured place to bank? Travis Credit Union can help. It is federally insured by the NCUA and focused on helping you achieve your financial goals. The credit union offers a variety of checking accounts, savings accounts, IRAs and other deposit accounts. TCU’s digital banking platform includes a top-rated mobile app that makes it easy to bank from anywhere. The credit union’s Fighting Fraud page outlines the many ways it works to keep you and your money safe from various scams and frauds.
With 24 branches serving 12 Northern California counties, excellent member service and the financial strength that has kept growing for 75 years, switch to Travis. Get started today at traviscu.org.
Frequently Asked Questions
Are credit unions safe for my money?
Yes. Credit unions can be a safe place to keep your money when they are federally insured by the NCUA.
Are credit unions FDIC insured?
No. Credit unions are insured by the National Credit Union Administration (NCUA), while banks are insured by the FDIC.
What does NCUA insurance cover?
NCUA insurance protects eligible deposit accounts if a federally insured credit union fails. Coverage is generally up to $250,000 per depositor, per ownership category.
Are credit unions safer than banks?
Both can be equally safe if they are federally insured. The main difference is the agency that provides insurance coverage.
Which credit union accounts are typically insured?
Checking accounts, savings accounts, share certificates, IRAs and certain trust accounts are generally covered by NCUA insurance. Investment products are not insured.
How can I tell if a credit union is federally insured?
Look for the NCUA logo at a branch or on the credit union’s website. You can also verify coverage using the NCUA’s online credit union locator.
When should I review my insurance coverage limits?
Review your coverage whenever your account balances approach $250,000 or when your ownership situation changes. The NCUA Share Insurance Estimator can help you understand your coverage.