You work hard for your money and when you deposit it in a financial institution, the last thing you want to experience is an uneasiness that your money isn’t protected in a worst-case scenario. This is where federal deposit insurance comes in. Whether your accounts are at a bank or a credit union, many of your deposits are insured by the U.S. government up to specific limits, giving you peace of mind that your money is safe.
What Is FDIC Insurance?
The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the U.S. government that protects deposits at FDIC-insured banks. If a bank fails, the FDIC steps in to ensure customers don’t lose their insured funds. Coverage applies to common account types like checking, savings, money market accounts, and certificates of deposit (CDs).
FDIC insurance covers up to $250,000 per depositor, per insured bank, for each account ownership category. This means your money is protected even if your bank experiences financial trouble.
Credit Unions Are Protected by the NCUA
Credit unions do not fall under the FDIC umbrella. Instead, your deposits are insured by the National Credit Union Administration (NCUA) through the National Credit Union Share Insurance Fund (NCUSIF). The coverage is virtually identical to the FDIC: up to $250,000 per depositor, per federally insured credit union, per ownership category.
Just like FDIC insurance, NCUA coverage protects your deposits in savings accounts, checking accounts (often called “share draft accounts” at credit unions), money market accounts, and share certificates (CDs). So, when you bank with a federally insured credit union, your money has the same level of protection you’d find at a bank and backed by the full faith and credit of the U.S. government.
How Deposit Insurance Works
Deposit insurance automatically applies when you open an account at an FDIC- or NCUA-insured institution. You don’t have to worry about signing up or paying extra for this coverage. If your financial institution were ever to close, insured funds would be repaid to you, typically within a few business days.
It’s also possible to increase your insured coverage by having accounts in different ownership categories, such as individual, joint, or retirement accounts. Both the FDIC and NCUA provide online tools to help you calculate your coverage and confirm your institution’s insurance status.
Why FDIC and NCUA Coverage is Important
Understanding FDIC and NCUA insurance helps you make smarter choices about where to keep your money, especially if you’re saving for emergencies or using an account on a daily basis. With the current economy feeling so shaky for many, having an insured account can give you more confidence and a sense of relief.
You can talk to us here at Space Age Credit Union if you ever have questions about the safety of your accounts. We want to make sure you know your deposits are protected, insured, and working hard for you every day.
