Does the FDIC Cover Credit Unions?
Understand how credit unions protect your deposits. Learn about the federal insurance that secures your money, comparable to FDIC bank coverage.
Understanding how financial institutions protect your deposits is important. While the Federal Deposit Insurance Corporation (FDIC) insures banks, credit unions are protected by a different federal agency. Both systems provide robust federal deposit insurance for account holders.
Deposit Insurance for Credit Unions
Credit unions are federally insured by the National Credit Union Administration (NCUA). This independent federal agency operates the National Credit Union Share Insurance Fund (NCUSIF). The NCUSIF protects accounts in federally insured credit unions.
The NCUSIF is backed by the full faith and credit of the U.S. government. This backing guarantees deposit safety, similar to the FDIC for banks. All federally chartered credit unions must be insured by the NCUSIF. Most state-chartered credit unions also opt for NCUSIF coverage.
Understanding NCUSIF Coverage
The NCUSIF insures deposits up to a standard maximum of $250,000 per depositor. Coverage applies per federally insured credit union and per account ownership category. If you have multiple accounts at the same credit union, the total insured amount depends on how those accounts are owned. Common covered accounts include checking, savings, money market, and certificates of deposit (CDs).
Coverage can extend beyond $250,000 if funds are held in different ownership categories. Single, joint, and certain retirement accounts (IRAs, Keoghs) are separate ownership categories. An individual could have $250,000 in a personal savings account and another $250,000 in an IRA at the same credit union, both fully insured. Joint accounts provide $250,000 coverage per co-owner, meaning a two-person joint account can be insured up to $500,000.
Trust accounts, both revocable and irrevocable, also offer distinct coverage. For revocable trusts, each owner is insured up to $250,000 for each unique named beneficiary. The NCUSIF does not insure investments like stocks, bonds, mutual funds, annuities, or life insurance policies, even if purchased through a credit union. Contents of safe deposit boxes are also not covered by NCUSIF.
Key Similarities and Differences
Both NCUSIF and FDIC insurance share similarities in protecting deposits. Each agency provides a standard $250,000 insurance per depositor. Both are backed by the full faith and credit of the U.S. government. This backing means insurance is equally reliable whether funds are in a credit union or bank.
The types of accounts covered by both agencies are similar, including checking, savings, money market, and CD accounts. The distinction lies in the type of financial institution each insures. The NCUA insures credit unions, which are member-owned, not-for-profit. The FDIC insures banks, which are typically for-profit institutions. From a depositor’s perspective, the safety and security of both federal insurance systems are identical.
Verifying Your Credit Union’s Insurance Status
Confirming your credit union’s federal insurance status is straightforward. All federally insured credit unions must prominently display the official NCUA insurance sign. This sign is visible at teller stations, in branches, and on the credit union’s website. Looking for this symbol verifies your deposits are protected.
The NCUA’s online tools also confirm a credit union’s insurance. The NCUA’s “Research a Credit Union” tool allows searching by name or location to confirm insured status. The NCUA also offers a “Share Insurance Estimator” tool on MyCreditUnion.gov, helping calculate coverage based on account types and ownership categories. Relying on federally insured institutions protects your deposits in the event of a financial institution’s failure.