Is my money safe in a credit union?

Is putting your money in a credit union safer than hiding it in your sock drawer or burying it in the backyard? Yes. Is it insured? Yes.

Your deposits in most credit unions are insured by the National Credit Union Administration, NCUA. The NCUA is the equivalent of the FDIC. The FDIC is for banks and savings and loans, the NCUA is for credit unions.

NCUA Logo

NCUAs share insurance fund is a federal fund backed by the full faith and credit of the United States government and they display the NCUA logo. That’s as safe as it is possible to get in the United States. If you don’t trust the U.S. government, some credit unions are insured by American Share Insurance (ASI), a private insurer of credit union savings. ASI has a higher insurance limit. Patelco used to be insured by ASI. The rest of this post is about the NCUA.

How much is insured by NCUA? Up to $250,000 per person per ownership category per credit union. Common ownership categories are “individual,” “joint,” “IRA,” and “revocable trust.”

If you are single, you can put $250, 000 in individual accounts, and up to another $250,000 in your IRAs. If you are married(1), you can also put $250,000 in a joint account. In addition, your spouse can put the same in their accounts. If you want to deposit more money than that, you will need an additional credit union.

The NCUA has a good FAQ explaining how their insurance works.

In 2008, NCUA insurance was increased from $100,000 to $250,000. It was scheduled to return to $100K at the end of 2009. Recent legislation has extended the $250K coverage to 2013.

What happens when a credit union fails? Usually the NCUA transfers your accounts to another credit union. Patelco acquired Sterlent and Cal State 9 credit unions recently. Friends of mine report that the transition went smoothly, although Patelco told Cal State 9 members that they could keep their same account numbers and that wasn’t true.

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(1) Joint tenancy with someone who is not your legal spouse can result in gift taxes. Please consult a tax professional and work to legalize same-sex marriages.

Other Coast Live Oak posts in the Credit Union series:
Move Your Money to Oakland,
PatelCo Credit Union,
Provident CU: Super Rewards Checking,
Alliant Credit Union: high savings rates
Oakland Credit Unions: the complete list

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2 Responses to “Is my money safe in a credit union?”

  1. Connie Says:

    I’ve had mine in a credit union for at least 25 years – they pay a little interest on the money in my checking account as well as in my savings.

  2. CO-OP network: ATMs for Credit Unions « Coast Live Oak Says:

    […] Other Coast Live Oak posts in the Credit Union series: Move Your Money to Oakland, Patelco Credit Union, Provident CU: Super Rewards Checking, Alliant Credit Union: high savings rates Oakland Credit Unions: the complete list Is my money safe in a credit union? […]

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