NCUA Share Insurance
The shares in your credit union are insured by the National
Credit Union Share Insurance Fund (NCUSIF), an arm of NCUA. Established by Congress
in 1970 to insure member share accounts at federally insured credit unions, the NCUSIF is
managed by NCUA under the direction of the three-person NCUA Board. Your share
insurance is similar to the deposit insurance protection offered by the Federal Deposit
Insurance Corporation (FDIC). This brochure gives a more detailed explanation of your
insurance coverage.
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.
Here are some important facts to remember about your share insurance:
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. 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.
As a member of an insured credit union, you do not pay directly for your share
insurance protection. Your credit union pays into the NCUSIF a deposit, and an insurance
assessment, based on the total amount of insured shares and deposits in the credit union.
Insured credit unions are required to deposit and maintain one percent of their insured
shares and deposits in the NCUSIF.The NCUSIF is backed by the full faith and credit of the
United States government.
Notice About Your Credit Union Accounts
Most properly established share accounts in federally insured credit unions are
insured up to the Standard Maximum Share Insurance Amount (SMSIA), which is $100,000 as of
April 2006, but may be increased in the future. Recent legislation has increased the
insurance coverage on certain retirement accounts, such as IRAs and Keoghs, 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 in the aggregate. There are
exceptions, though. 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 $100,000 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 $100,000 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.
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 the
SMSIA.
