Your Insured Funds (more details)


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NCUA Insured Funds (FAQ)

The purpose of this page is to help you understand your share insurance protection. The National Credit Union Administration (NCUA) is an independent agency of the United States Government. NCUA regulates, charters, and insures the nation’s federal credit unions. In addition, NCUA insures state-chartered credit unions which desire and qualify for federal insurance. The shares in your credit union are insured by the National Credit Union Share Insurance Fund (NCUSIF) or the Fund, an arm of NCUA. Established by Congress in 1970 to insure member share accounts at federally insured credit unions, the Fund is managed by NCUA under the direction of the three-person NCUA Board. Your share insurance is similar to the deposit insurance protection offered by the Federal Deposit Insurance Corporation (FDIC). This page gives a more detailed explanation of insurance coverage.

Credit unions which are insured by the National Credit Union Share Insurance Fund must display, in their offices, the official NCUA insurance sign which appears on the cover of this page. All federal credit unions must be insured by NCUA, and no credit union may terminate its federal insurance without first notifying its members. Here are some important facts to remember about your share insurance: 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 which may be experiencing problems, and liquidations or failures are usually done only as a last resort. If a federally insured credit union does fail, however, the NCUSIF will make any necessary payouts to the credit union’s members. These payouts are usually done within 2 days from the time the credit union closes its doors. Insured credit unions are required to deposit and maintain one percent of their insured shares and deposits in the NCUSIF.

The Fund is currently at the strongest and best reserved level in its history. Historically, deposit insurance funds strive for a ratio of equity to insured savings of at least one percent. The NCUSIF ratio of equity to insured shares and deposits is normally 1.25 percent to 1.30 percent. As a member of an insured credit union, you do not pay directly for your share insurance protection. Your credit union pays into the NCUSIF a deposit, and an insurance assessment, based on the total amount of insured shares and deposits in the credit union.

MOST FREQUENTLY ASKED ABOUT THE NATIONAL CREDIT UNION SHARE INSURANCE FUND

1. Which credit unions are insured by NCUSIF?

NCUSIF insures member shares in all federal credit unions (FCU) and those federally insured state chartered credit unions (FISCU) that apply for and meet the insurance standards. Insured credit unions are required to indicate their insured status in their advertising and to display the official NCUSIF insurance sign at their offices. Some state credit unions are insured by private insurance or guaranty corporations which are separate and apart from NCUSIF.

2. How does NCUSIF share insurance protect credit union members against loss?

Each credit union approved for NCUSIF share insurance must meet high standards of safety and soundness in its operation. Adherence to these standards is determined regularly through credit union examinations by federal and state examiners. If an insured credit union gets into financial difficulties and must be closed, the NCUSIF acts immediately to protect each member’s share account.

3. Does NCUSIF share insurance protection apply only if a credit union is liquidated?

No. Liquidation is the only situation in which a member is directly provided share insurance protection by the payment of a check for his or her insured savings. However, indirect protection is pro-vided when the NCUA Board, through the NCUSIF, authorizes financial assistance to a credit union to enable it to overcome a temporary financial setback. In a case where a credit union is unable to overcome its difficulty, financial assistance may be authorized to accomplish a merger that protects the continuing credit union from loss and provides continued credit union service to the members of the merging credit union.

4. How does NCUSIF pay members their shares when an insured credit union is liquidated?

Checks for each member’s shares (less any amounts due on outstanding loans) up to the insurance limit are mailed to the member’s last known address as shown in the records of the credit union. These checks are usually mailed several days after the credit union is placed into liquidation. In situations where on-site payment is more convenient, the NCUA liquidation team will give checks directly to members.

5. What happens to the member’s share account when an insured credit union is merged into another insured credit union?

Each member’s share account is transferred to the continuing credit union. Accrued dividend credit is also transferred. On the effective date of the merger, each merging credit union member has full membership rights to all the financial services pro-vided by the continuing credit union.

6. Does NCUSIF share insurance protect the interest of creditors?

No. NCUSIF share insurance protects only credit union members.

SHARE INSURANCE COVERAGE

7. What is the basic NCUSIF share insurance coverage?

The basic insured amount for a credit union member under current law is $100,000. Share accounts maintained in different rights or capacities, or forms of ownership, may each be separately insured up to $100,000. Thus, a member may hold or have an interest in more than one separately insured share account in the same insured credit union.

8. What types of accounts are insured?

All types of member share accounts and deposits received by the credit union in its usual course of business, including regular shares, share certificates, and share draft accounts are insured. Investment products offered by a credit union to its members, such as mutual funds, annuities, and other non deposit investments are not insured by the NCUSIF.

9. Is NCUSIF share insurance coverage increased by placing funds in two or more types of share accounts in the same credit union?

No. NCUSIF share insurance is not increased merely by dividing funds owned in the same right and capacity among the types of share accounts available. For example, a regular share and a share draft account owned by the same member are added together and insured up to $100,000.

10. If a member has accounts in several different insured credit unions, will the accounts be added together for the purpose of insurance coverage?

No. The maximum insurance of $100,000 is applicable to share accounts in each insured credit union. A member who has share accounts in two or more different insured credit unions would have up to $100,000 insurance in each credit union. In the case of a credit union having one or more branches, the main office and all branch offices are considered as one credit union.

NCUSIF INSURANCE OF INDIVIDUAL AND JOINT ACCOUNTS

11. If a member has more than one individual account in the same insured credit union is each account insured to $100,000?

No. Individual share accounts held by the same member are added together and are insured up to $100,000. An individual share account is an account solely owned by one individual without the right of withdrawal by another individual. IRA, Keogh, and Deferred Compensation accounts are insured separately up to $100,000. See the section on NCUSIF Insurance of Special Accounts for more details.

12. What types of joint accounts may be insured?

NCUSIF share insurance covers joint accounts owned in any manner conforming with applicable state law such as joint tenants with a right of survivorship, tenants by the entireties, tenants in common, or an account owned by a husband and wife as community property in states recognizing this particular form of joint ownership.

13. If two or more persons, such as husband and wife, have a joint account in the same credit union as well as their own individual accounts, is each account separately insured?

Yes. Joint accounts are insured separately from individual accounts up to a maximum of $100,000, provided that each of the co-owners has personally signed an account signature card and has a right of withdrawal on the same basis as the other co-owners (if state law limits a minor’s right of withdrawal, the account will still be insured as a joint account). However, the insurance protection on joint accounts is not increased by rearranging the names of the owners, changing the style of names, or by establishing more than one joint account for the same combination of owners in the same insured credit union. A joint share account shall in no case be entitled to insurance coverage in excess of $100,000.

14. Is the answer to question 13 the same if funds in the individual and joint accounts of husband and wife all consist of community property?

Yes. In those jurisdictions recognizing community property, community funds may be maintained in accounts in the individual names of each spouse or a joint account in the names of both. Each account is separately insured up to a maximum of $100,000.

15. If a person has an interest in more than one joint account, what is the extent of the insurance coverage?

A person holding an interest in more than one joint account may receive a maximum of $100,000 insurance coverage on the total of his/her interests in those joint accounts. Actual coverage is determined as follows.

Step 1 - All joint accounts owned by the same combination of individuals are added together and are insured up to $100,000.

Step 2 - The person’s insured interests in each remaining joint account (those owned by different combinations of individuals) are added together and insured to $100,000 less the person’s interest under Step 1. For example, assume that H and W own a joint account containing $110,000 and H and C own a joint account containing $35,000. The $110,000 account owned by H and W is insured only to $100,000 leaving $10,000 uninsured. Since the interests of the co-owners of a joint account are deemed equal for insurance purposes (except in the case of a tenancy in common if unequal interests are shown on the account records of the credit union), the $100,000 insured amount of the $110,000 account is prorated equally between H and W giving each an insured interest of $50,000. The $35,000 in the other account is prorated equally between H and C giving each a $17,500 insured interest in that account. Thus, H has a total insured interest of $67,500 in the two accounts, and W and C have insured interests of $50,000 and $17,500, respectively. Since no person’s total insured interest in joint accounts exceeds the $100,000 limit, the two accounts totaling $145,000 are entitled to $135,000 in insurance, representing the sum of the total insured interest of each co-owner. The remaining $10,000 is uninsured.

The following illustrations show how typical families may use multiple ownership of accounts to increase the insurance coverage for family funds. In all cases, the accounts illustrated must meet the share insurance coverage requirements as published in the code of Federal Regulations (12 C.F.R. 745).

Family of Two
Individual Accounts	Husband	Individual	$100,000
	Wife	Individual	100,000
Joint Tenancy Accounts	Husband & Wife (Joint)		100,000
Testamentary Revocable Trust Accounts	Husband as Trustee for Wife		100,000
	Wife as Trustee for Husband		100,000
		TOTAL	$500,000

Family of Three
Individual Accounts	Husband	Individual	$100,000
	Wife	Individual	100,000
	Child	Individual	100,000
Joint Tenancy Accounts	Husband & Wife (Joint)		100,000
	Husband & Child (Joint)		100,000
	Wife & Child (Joint)		100,000
Testamentary Revocable Trust Accounts (for Spouse- Child- Grandchildren)	Husband as Trustee for Wife		100,000
	Husband as Trustee for Child		100,000
	Wife as Trustee for Husband		100,000
	Wife as Trustee for Child		100,000
		TOTAL	$1,000,000

Family of Four
Individual Accounts	Husband	Individual	$100,000
	Wife	Individual	100,000
	Child #1	Individual	100,000
	Child #2	Individual	100,000
Joint Tenancy Accounts	Husband & Wife (Joint)		100,000
	Husband & Child #1 (Joint)		100,000
	Wife & Child #2 (Joint)		100,000
	Child #1 & Child #2 (Joint)		100,000
Testamentary Revocable Trust Accounts (for Spouse- Child- Grandchildren)	Husband as Trustee for Wife		100,000
	Wife as Trustee for Husband		100,000
	Husband as Trustee for Child #1		100,000
	Wife as Trustee for Child #1		100,000
	Husband as Trustee for Child #2		100,000
	Wife as Trustee for Child #2		100,000
		TOTAL	$1,400,000

NCUSIF INSURANCE OF SPECIAL ACCOUNTS

16. What is the insurance coverage on a trust account held under the provisions of an irrevocable express trust?

The trust interest of a beneficiary in a valid irrevocable trust, if capable of evaluation in accordance with published rules, is insured up to $100,000 separately from the individual accounts of the settler (grantor), trustee, or the beneficiary. Either the settlor or the beneficiary must be a member to obtain insurance benefits. All trust interests created by the same settlor (grantor) in the same credit union for the same beneficiary (including Education IRAs) will be added together and insured in the aggregate to the maximum of $100,000.

17. What is the insurance coverage on a revocable trust account, a tentative or "Totten" trust account, or a "payable-on-death" account?

These accounts, or any similar accounts which evidence an intention that the funds shall pass on the death of the owner to a named beneficiary, are considered testamentary accounts and are insured as a form of individual account. If the beneficiary is a spouse, child, or grandchild of the owner, the funds in such accounts are insured for the owner up to a total of $100,000 for each such beneficiary separately from any other individual accounts of the owner. If the beneficiary is other than a spouse, child, or grandchild of the owner, the funds in the account are, for insurance purposes, added to any other individual accounts of the owner and insured to a total of $100,000. In the case of a revocable trust account, the person who holds the power of revocation is deemed to be the owner of the funds in the account.

18. Is the interest in a pension or profit sharing account insured any differently than a member’s individual account?

Yes. For insurance purposes, pension and profit sharing accounts are considered to be trust accounts. The ascertainable interest of each participant (if a member of the credit union) in such account is insured to $100,000 separately from other accounts of the member.

19. May a person receive separate insurance on each of several pension or profit sharing plans established by the member’s employer with the same credit union?

No. Except as provided below with respect to Individual Retirement Accounts (IRA), Keogh, and Deferred Compensation accounts, if two or more pension plans, or a profit sharing and a pension plan, are established by an employer for the same individual who is a member of the credit union, the beneficiary’s interest in the two accounts will be added together and insured up to $100,000.

20. What insurance coverage is provided for IRA, Keogh and Deferred Compensation accounts?

IRA, Keogh, and Deferred Compensation accounts are insured separately to $100,000 from other accounts that the member maintains in the same credit union. However, a Roth IRA will be added to a regular or traditional IRA and insured in the aggregate to the maximum of $100,000.

21. Are accounts held by a person as executor, administrator, guardian, custodian, or in some other similar fiduciary capacity insured separately from his individual account?

Yes. If the records of the credit union indicate that the person is depositing the funds in a fiduciary capacity, such funds would be separately insured from the fiduciary’s individually owned account. Funds in accounts held by guardians, conservators, or custodians (whether court-appointed or not) are also insured separately from other accounts of the ward.

22. When an account is designated as held by a person as agent for the true owner of the funds, how is the account insured?

The account is insured as an account of the principal or true owner. The funds in the account are added to any other member account owned by the true owner and the total is insured up to a maximum of $100,000.

23. Is an account held by a corporation, partnership, or unincorporated association insured separately from he individual accounts of the stockholders, partners, or members?

Yes. If the corporation, partnership, or unincorporated association has obtained membership in the credit union and is engaged in an independent activity, its account is separately insured to a total of $100,000. The term "independent activity" means an activity other than one directed solely at increasing insurance coverage.

NOTICE

This page provides examples of insurance coverage under rules issued by the NCUA Board through the National Credit Union Share Insurance Fund (NCUSIF). Since the scope of this page is limited, credit union members may wish to contact NCUA for greater detail concerning the technical aspects of insurance coverage. Members or their counsel may also wish to consult the NCUA Rules and Regulations relating to share insurance coverage published in the Code of Federal Regulations (12 C.F.R.745). You can find NCUA’s insurance regulations at www.ncua.gov under ‘reference information’. NCUA’s specific rules on insurance coverage control how accounts will be insured. Members are advised that no persons may, by representations or interpretations, effect the extent of insurance coverage provided by the Federal Credit Union Act as amended and the rules and regulations for insurance of share accounts.

Also, members are advised to review their accounts annually and whenever they open new accounts or modify existing accounts to ensure that all of their funds continue to be insured.

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