Credit union failure is rare, but if it does happen, and if your credit union is backed by the National Credit Union Administration, your deposits are protected.
NCUA insurance guarantees that you’ll receive the money that you’re entitled to from your deposit account if your credit union goes under. It guarantees up to $250,000 per person, per institution, per ownership category.
The NCUA is a federal agency created by Congress to regulate credit unions and insure your money. Like the Federal Deposit Insurance Corp., which insures bank deposits, the NCUA makes sure your credit union assets stay secure.
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How NCUA insurance works
The government requires all federally chartered credit unions to carry NCUA insurance. State-chartered credit unions may purchase private insurance to cover deposits, but many opt for coverage through the NCUA. This premium doesn’t come out of your wallet; credit unions cover the cost.
The NCUA insures up to $250,000 per depositor, per institution, per ownership category. “Ownership category” refers to account type, usually single or joint. If you have a single and a joint account at the same institution, both are insured up to the $250,000 limit.
Here’s how similar the NCUA and the FDIC are — and how they keep your money safe:
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| An independent federal agency that insures consumers’ deposits. |
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| $250,000 per person, per institution, per ownership category. |
| Checking accounts. Savings accounts. CDs. Money market accounts. Certain other accounts.
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| Mutual funds. Annuities. Treasury securities. Life insurance policies. Stocks. Bonds.
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Like FDIC insurance, NCUA coverage extends only to deposit accounts: checking, savings and money market accounts and certificates of deposit. Some retirement plans and employee benefit plans are also covered and count as separate ownership categories. Investment losses aren’t covered—even if you purchased the investments through an insured credit union—and neither are the contents of safe deposit boxes.
Here's how to get your money back if your credit union goes under
Before a credit union fails, the NCUA will try to sell its deposits and loans to another credit union. If the sale is successful, customers’ accounts are simply transferred.
If not, the NCUA will send customers a check for the insured balance of their deposits, usually within a few days of a credit union’s closing. The NCUA will notify customers via mail if it requires further action to redeem deposits.
» Looking for a safe place to park your money? Review NerdWallet's list of best savings accounts.
Here are the limits of NCUA insurance — and how to maximize it
Deposits beyond $250,000 aren’t insured, even if they’re in an eligible account, but there’s a way around that: You can distribute your money across different institutions to get coverage. The following example shows how you can maximize your deposit insurance.
| | | NCUA coverage (up to $250,000) |
|---|
| | $200,000 in checking and savings | $200,000 for the joint category $100,000 for the single category |
| $25,000 in checking $75,000 in a money market account | | $100,000 for the single category |
Total funds insured: $400,000 |
Ownership categories, too, can affect how your money is insured. In the example above, you're covered beyond $250,000 at credit union No. 1 because the single-owned CDs are considered one ownership category and the joint checking and savings accounts are considered another.
Choose the options that allow you to protect all of your money.
Next steps for your own peace of mind
Find out whether your deposits are federally insured by searching for your credit union on the NCUA’s credit union locator. If your deposits exceed $250,000, spread your money across multiple banks or credit unions to protect it as much as possible.
When it comes to your money’s safety, both credit unions and banks are solid so long as they’re insured. But there are important differences between credit unions and banks that you should consider if choosing between the two. If you decide on a credit union, here are some of our favorites.
FAQs
NCUA insurance guarantees that you'll receive the money that you're entitled to from your deposit account if your credit union goes under. It guarantees up to $250,000 per person, per institution, per ownership category.
How does NCUA coverage work? ›
The Share Insurance Fund insures individual accounts at federally insured credit union up to $250,000, and a member's interest in all joint accounts combined is insured up to $250,000. The Share Insurance Fund also separately protects IRA and KEOGH retirement accounts up to $250,000.
Are joint accounts NCUA insured to $500,000? ›
The NCUSIF provides each joint account holder with $250,000 coverage for their aggregate interests at each federally insured credit union. For example, a two person joint account with no beneficiaries has $500,000 in coverage.
Does adding a beneficiary increase NCUA coverage? ›
Joint Accounts
Each owner on the account is insured for up to $250,000. Beneficiaries may increase coverage limits.
How long does NCUA have to pay you back? ›
If the member shares are not assumed by another credit union, all verified member shares are typically paid within five days of a credit union's closure. No member of a federally insured credit union has ever lost a penny in insured accounts.
Which is safer, FDIC or NCUA? ›
One of the only differences between NCUA and FDIC coverage is that the FDIC will also insure cashier's checks and money orders. Otherwise, banks and credit unions are equally protected, and your deposit accounts are safe with either option.
Is NCUA insurance per account or per person? ›
The NCUA insures up to $250,000 per depositor, per institution, per ownership category. “Ownership category” refers to account type, usually single or joint. If you have a single and a joint account at the same institution, both are insured up to the $250,000 limit.
Where do millionaires keep their money if banks only insure 250k? ›
Millionaires can insure their money by depositing funds in FDIC-insured accounts, NCUA-insured accounts, through IntraFi Network Deposits, or through cash management accounts. They may also allocate some of their cash to low-risk investments, such as Treasury securities or government bonds.
Are credit unions safe if banks collapse? ›
If the bank fails, you'll get your money back. Nearly all banks are FDIC insured. You can look for the FDIC logo at bank teller windows or on the entrance to your bank branch. Credit unions are insured by the National Credit Union Administration.
Can you still withdraw money from a joint account if one person dies? ›
Joint bank accounts
If one dies, all the money will go to the surviving partner without the need for probate or letters of administration. The bank may need the see the death certificate in order to transfer the money to the other joint owner.
By structuring your deposits using different ownership assignments such as single ownership, joint ownership, and revocable family trusts, you can maximize your NCUA insurance coverage.
How does NCUA insurance work with beneficiaries? ›
In applying the $250,000 per beneficiary insurance limit, the NCUA combines an owner's POD accounts with the living trust accounts that name the same beneficiaries at the same credit union. NCUA insurance is provided to any co-owner that is a member of the credit union.
Are non-member deposits insured by NCUA? ›
It also includes those nonmembers permitted under the Act to maintain accounts in an insured credit, including nonmember credit unions and nonmember public units and political subdivision. Therefore, only the above-cited nonmember accounts are treated as member accounts for insurance purposes.
What is the NCUA 72 hour rule? ›
A federally insured credit union that experiences a reportable cyber incident must report the incident to the NCUA as soon as possible and no later than 72 hours after the credit union reasonably believes that it has experienced a reportable cyber incident.
Is my money safe with NCUA? ›
Just like the FDIC, the NCUA insures up to $250,000 to all credit union members and provides protection in the event of a credit union failure.
What happens to my money if my credit union closes? ›
The NCUA will send you a letter notifying you if your credit union closes and will return your funds within five days of closing. If your balance exceeds $250,000, you'll need to complete a Member Confirmation and Affidavit form to receive any funds over the insured limit.
How much does NCUA cover per beneficiary? ›
Irrevocable trust accounts: Each owner (so long as all owners OR all beneficiaries are members of the credit union) is insured up to $250,000 for each beneficiary named or identified in the irrevocable trust, subject to specific limitations and requirements.
Has the NCUA ever paid out? ›
As liquidating agent of the former corporate credit unions' asset management estates, the NCUA has previously made five rounds of distributions. In 2020, 2021, and 2022, distributions were made to capital holders of Southwest, Members United, Constitution, and U.S. Central.
How much does FDIC cover if I have accounts at different branches of the same bank? ›
The standard deposit insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per ownership category. Deposits held in different ownership categories are separately insured, up to at least $250,000, even if held at the same bank.
