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Share Insurance Limit Raised to $250,000
Credit Union Share Insurance Fund (NCUSIF), an arm of NCUA.
Established by Congress in 1970 to insure member share accounts at federally insured credit
unions, the NCUSIF 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).
No credit union may terminate its federal insurance without first
notifying its members.
Here are some important facts to remember about your share
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. Liquidations or failures are 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
3 days from the time the credit union closes its doors.
NCUSIF a deposit, and an insurance assessment, based on the total amount of insured shares and deposits in the credit union. Insured
credit unions are required to deposit and maintain one percent of their insured shares and deposits in the NCUSIF. The NCUSIF is
backed by the full faith and credit of the United States government.
Most properly established share accounts in federally insured credit unions are insured up to the Standard Maximum Share Insurance
Amount (SMSIA). Recent legislation has increased the insurance
coverage on accounts up to $250,000. Generally, if a credit union member has more than one account in the same credit union, those
accounts are added together and insured in the aggregate. There are exceptions, though. You may obtain additional separate coverage
on multiple accounts, but only if you have different ownership interests or rights in different types of accounts and you properly complete
account forms and applications. For example, if you have a regular share account and an Individual Retirement Account (IRA) at the same
credit union, the regular share account is insured up to $250,000 and the IRA is separately insured up to $250,000. However, if you have a
regular share account, a share certificate, and a share draft account, all in your own name, you will not have additional coverage. Those
accounts will be added together and insured up to $250,000 as your individual account. Roth IRAs will be added together With traditiona
IRAs and insured up to $250,000.
Additional coverage is available on revocable trust or payable on death accounts. You can now name a parent or sibling as a beneficiary
to get separate coverage. Previously, beneficiaries had to be a spouse, child or grandchild.
The rules on joint accounts have been simplified. A co-owner’s interest in all joint accounts in the same credit union will be added
together and insured up to the SMSIA.
For more information, please visit the NCUA Share Insurance Estimator on the NCUA.gov website or contact us here at your credit union.