Is My Money Safe? How Share Insurance Works

What the Coverage Is

Deposits at federally insured credit unions are covered by the National Credit Union Share Insurance Fund, administered by the National Credit Union Administration. The fund is backed by the full faith and credit of the United States government.

The standard maximum is $250,000 per member, per insured credit union, per ownership category. Banks are covered by the FDIC under the same limit and essentially the same structure. Different fund, equivalent protection, a federally insured credit union is not a riskier place to keep money than a bank.

No member has ever lost a penny of insured savings at a federally insured credit union. When one fails, the NCUA either arranges a merger into a healthy credit union (usually with no interruption members notice), or pays out insured balances directly, typically within days.

What Is Covered, and What Is Not

Covered: share draft (checking) accounts, share (savings) accounts, money market accounts, share certificates, and IRA and Keogh accounts held at the credit union.

Not covered: mutual funds, stocks, bonds, annuities, life insurance policies and cryptocurrency, even when purchased through the credit union or from someone sitting in its branch. Contents of a safe deposit box are not share-insured either.

That distinction matters most at exactly the moment it is least visible: an investment product sold on credit union premises, by someone the credit union introduced you to, is still an investment product. It can lose value. Ask directly whether a product is share-insured before you buy it, and treat any hedging in the answer as a no.

The Part Almost Nobody Uses: Ownership Categories

The limit is not $250,000 per person. It is $250,000 per person per ownership category, and the categories are separate from each other.

• Single accounts: accounts in one person's name alone. All of them combined are covered to $250,000.
• Joint accounts: each co-owner is insured up to $250,000 for their share, in a category separate from their single accounts. A jointly owned account with two equal owners is therefore covered to $500,000.
• Revocable trust / payable-on-death accounts: generally insured up to $250,000 per owner per eligible beneficiary named.
• Retirement accounts: IRAs and similar held at the credit union get their own $250,000, separate from everything above.

Worked through, an ordinary married couple can hold well over $1,000,000 at a single credit union, fully insured, without any unusual arrangement: $250,000 each in single accounts, $500,000 in a joint account, and $250,000 each in retirement accounts.

How to Check an Institution Is Insured

Federally insured credit unions must display the official NCUA sign at branches and on their websites. You can also verify any institution independently through the NCUA's Research a Credit Union tool at mycreditunion.gov.

Worth doing rather than assuming. A small number of credit unions are privately insured rather than federally insured, that is legal and must be disclosed, but private insurance is not backed by the United States government, which is a materially different thing. If an institution is privately insured, the difference should be stated plainly; if you cannot tell, ask.

What This Means in a Scare

When headlines are about institutions failing, the useful response is to confirm two things: that your institution is federally insured, and that your balances sit within the categories. If both are true, the correct action is usually none.

Moving money in a panic is how people end up paying certificate early-withdrawal penalties, missing automatic payments, and occasionally handing funds to someone who called claiming to be helping them "secure" their account during the turmoil. Your credit union will never call and ask you to move money to keep it safe.