We have several accounts at a credit union. Can you explain how these accounts are insured and exactly how that process works?

Personal Finance February 17, 2013|Print

The National Credit Union Administration (NCUA) provides insurance for deposits in federally insured credit unions. The standard maximum insurance amount is $250,000. As long as your deposits stay below the maximum amounts that are covered, your money is safe in a credit union. Share insurance is similar to the deposit insurance protection offered for commercial banks, savings banks, and savings and loans by the Federal Deposit Insurance Corporation (FDIC).

Credit unions that are insured must display in their offices the official NCUA insurance sign. All federal credit unions must be insured by NCUA, and no credit union may terminate its federal insurance without first notifying its members. Check to make sure that your credit union is federally insured. 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 that may be experiencing problems. Liquidations or failures are a last resort. If a federally insured credit union does fail, however, insurance will make necessary payouts to the credit union’s members. These payouts are usually made within three 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 an insurance assessment, based on the total amount of insured shares and deposits in the credit union.

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