By: Stella Katsipoutis
The main purpose of opening a checking, savings or any other deposit account is to keep your hard-earned money safe, so choosing a financial institution that you can trust is critically important. Just about everyone is familiar with the Federal Deposit Insurance Corporation (FDIC), which protects bank customers’ accounts in the event of a bank failure. But even though there are almost 110 million credit union members nationwide, according to the Credit Union National Association (CUNA), many people are still confused about how credit unions insure accounts for their members. One of the most popular questions we are asked by anyone considering becoming a credit union member is: Are credit unions insured like banks?
The short answer is yes. But before we talk about how deposit insurance can protect you, let’s talk about something more important. Is your bank or credit union financially sound? Your first line of defense is making sure the bank or credit union you trust with your money has a long and strong financial track record. Check here for more information about VyStar’s strong financial condition and 65-year history of serving the communities of Northeast Florida. Still have questions? Visit one of our 42 branch locations and speak with one of our branch representatives about VyStar, or call us at (904) 777-6000 or 1 (800) 445-6289.
So, you’ve done your research and you are comfortable that your bank or credit union is in strong financial condition. Now, let’s verify that they are insured.
Just because credit unions are not insured by the FDIC, that’s not to say they’re uninsured. While there are some differences between the two, banks and credit unions are very similar when it comes to keeping your deposited funds secure. Accounts at federally insured credit unions (like VyStar Credit Union) are protected by the National Credit Union Share Insurance Fund (NCUSIF), which is provided through the National Credit Union Administration (NCUA). Let’s take a closer look at how the two match up.
Just like the FDIC, the NCUSIF is “backed by the full faith and credit of the United States government.” Both NCUSIF and FDIC insurance provide up to $250,000 in coverage to each share owner, per insured credit union, for each account ownership category (i.e., checking, savings, and money market accounts; IRAs; and certificates). Neither type of coverage protects investments (i.e., stocks, bonds, mutual funds, annuities and life insurance policies).
Here are a couple of general examples that should help you break it down:
Individual Retirement Accounts (IRAs) are treated separately. They are personal savings plans that allow you to set aside money for retirement. The combined balances in a single bank or credit union for Traditional, Simplified Employee Pension (SEP) and Roth IRA plans are insured separately from other accounts at that bank or credit union up to $250,000.
Still confused? NCUA has an insurance estimator that should help. This tool can you help you determine if you have adequate share insurance at one NCUSIF-insured credit union.
Most credit unions are federally insured. How can you tell? Credit unions that are NCUSIF-insured are required to display the official “NCUA Insurance” logo and signage, so look for it the next time you visit your credit union branch of choice or their website, or simply ask! At VyStar, you can be sure that your accounts are safeguarded by the NCUA and the federal government. If you have any questions about a VyStar membership, our representatives are always happy to help you get the information you need. Please don’t hesitate to visit your nearest branch, send us an email, or call us at (904) 777-6000 or 1 (800) 445-6289.
In short, credit unions are a great place to keep your money safe. Not only are they secure, but they also provide wonderful benefits to their members, such as higher-interest savings accounts and lower-interest loans than those offered at banks. Credit unions are also owned by their members—not by stockholders, like banks are—so our goal is to serve you and your best financial interests. Check out this fun infographic to learn more about the credit union difference.
The content provided in this blog consists of the opinions and ideas of the author alone and should be used for informational purposes only. VyStar Credit Union disclaims any liability for decisions you make based on the information provided.