National Credit Union Share Insurance Fund (NCUSIF)
Share Insurance for Credit Unions
The National Credit Union Share Insurance Fund (NCUSIF) is a government-backed insurance fund for credit union deposits. If your credit union goes belly-up – numerous banks and credit unions failed around the 2008 financial crisis – the NCUSIF keeps your money safe. Instead of losing everything, this insurance coverage replaces money that you might otherwise lose from your checking or savings account.
If you’re familiar with FDIC insurance, NCUSIF insurance is almost identical: both forms of coverage are backed by the US government, and they currently insure up to $250,000 per account holder per institution. As a result, if you have $5,000 in savings and there’s a failure or a robbery, you’ll get all of your money (typically within a few days). This makes credit union and bank accounts among the safest places to keep your money.
NCUSIF covers deposits in your “share” accounts. This is credit union terminology for accounts held and managed by the credit union:
- Checking accounts - your everyday spending and transaction account
- Savings accounts - your “holding area” for funds you don’t need to use in the immediate future
- Money market accounts - which pay interest and allow limited spending
- Certificates of Deposit (CDs) - which pay more when you commit to leaving your money with the credit union
Keep in mind that you might buy or invest in other types of products inside the walls of your credit union. However, those products do not always enjoy NCUSIF protection. For example, stocks, bonds, mutual funds (including money market funds), and the contents of your safe deposit box are not covered by NCUSIF and you can lose money with those instruments.
NCUSIF is only available at federally insured credit unions, administered by the National Credit Union Administration (NCUA). There are other types of credit unions, some of which use private insurance (which isn’t necessarily a bad thing, but it’s not as safe as NCUSIF coverage). Look for the NCUA placard in your credit union branch or online.
Amount of Coverage
Understanding how much coverage you have can be tricky. If you want to be safe, assume you’re covered up to $250,000 per federally insured credit union. If you have more than that, you can keep the excess in a different credit union.
However, you might not need to use more than one credit union. The $250,000 limit is per accountholder (or “registration,” if you prefer), and you might have accounts titled in several different names:
- An individual account
- A joint account
- An Individual Retirement Account (IRA)
- A Keogh retirement account
Each of those account titles gets its own $250,000, so you could potentially have up to one million dollars of coverage at one credit union. The best way to find out how much coverage you have is to speak with a credit union employee and use the NCUA’s share insurance estimator (an online calculator for determining your benefits).
Cost of Insurance
NCUSIF insurance is free – there’s no separate fee for your account and you don’t need to sign up. To be more precise, coverage is included with any deposit account (other accounts are not insured – see above) at a federally insured credit union, but the credit union pays the cost of deposit insurance. Since you, as an account holder, are a partial owner of the credit union, you indirectly pay the fee.
Credit unions contribute to the fund by keeping 1% of their deposits in the Share Insurance Fund. The NCUA can also collect additional premiums if the need arises.
If, for some reason, the fund was to run dry, the fund is backed by the full faith and credit of the US government – the Treasury could provide funds (ultimately funded by taxpayers) to keep everything afloat. To date, the fund has been financed only by credit unions themselves and no government funds have been necessary.