What Is NCUSIF Share Insurance ?
The shares in your credit union are insured by the National 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). This Estimator gives a more detailed explanation of insurance coverage.
Credit unions that are insured by the NCUSIF must display, in their offices, the official NCUA insurance sign. All federal credit unions must be insured by NCUSIF, 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 NCUSIF has several programs to help insured credit unions that 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 two 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. 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.
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Properly established share accounts in federally insured credit unions are insured up to $100,000. Generally, if a credit union member has more than one account in the same credit union, those accounts are added together and insured up to $100,000. There are exceptions, though. You may obtain additional insurance 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 IRA account at the same credit union, each account is insured up to $100,000. However, if you have a regular share account, share certificate account and share draft account, all in your own name, you will not have additional coverage. Those accounts will be added together and insured up to $100,000 as your individual account.
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 $100,000.