When you deposit money at a credit union, you might wonder who guarantees that money will be safe. Similar to how the Federal Deposit Insurance Corporation (FDIC) protects bank deposits, the National Credit Union Administration (NCUA) serves as the federal insurer for credit union accounts.
The NCUA is an independent federal agency responsible for supervising and regulating federal credit unions. Its key role is managing the National Credit Union Share Insurance Fund (NCUSIF), which protects members’ deposits at federally insured credit unions. This insurance coverage guarantees that if a credit union fails, members are reimbursed up to $250,000 per depositor, per credit union, for each account ownership category — including individual, joint, and retirement accounts.
Credit unions typically use the term “shares” and “share accounts” to describe deposits because members are actually partial owners of the credit union. Despite the different language, NCUA insurance coverage functions like FDIC insurance for banks.
The NCUA was established following the Great Depression to support public confidence in credit unions. While the FDIC was created in 1933 to insure bank deposits, the National Credit Union Share Insurance Fund was created by Congress in 1970 to offer similar protections for credit union members.
In contrast to the FDIC, which oversees banks and savings associations, the NCUA’s jurisdiction is limited to federal credit unions and most state-chartered credit unions that opt into federal insurance. Both agencies provide equivalent insurance limits backed by the full faith and credit of the U.S. government.
To confirm your credit union is insured, look for the official NCUA insurance sign displayed in branches or on websites. For additional verification, use the NCUA’s official Credit Union Locator tool.
Common Questions About NCUA Insurance:
- Is insurance automatic and free? Yes, coverage is automatic for accounts at federally insured credit unions, with no fees.
- What accounts are insured? Typical insured accounts include share savings, share draft (checking), money market accounts, and share certificates (similar to CDs). Investment products like mutual funds or annuities offered through credit unions are not insured.
- Can coverage exceed $250,000? Yes. The limit applies per depositor, per credit union, and by ownership category. Joint accounts, IRAs, and trusts have separate coverage, potentially increasing total insured amounts.
The NCUA plays a crucial role in maintaining the safety and stability of the credit union system, giving members peace of mind that their savings are federally protected. For more on federal deposit insurance, you can also explore our glossary entry on financial intermediaries.
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