If your bank or credit union carries federal deposit insurance, your money is protected by the U.S. government. Should the worst happen, you won’t lose your hard-earned savings.

A brief history of the FDIC and NCUA

By 1933, 9,000 banks had failed due to the stock market crash of 1929. $7 billion of assets were lost. The U.S. government needed a way to inspire confidence in banks again, so they passed the Banking Act of 1933. This act included the creation of the Federal Deposit Insurance Corporation (FDIC), which insured each customer’s deposits up to $2,500 at that time.

Although the first U.S. credit union was founded in 1909, the National Credit Union Administration (NCUA) wasn’t founded until 1970. The NCUA enabled credit union members to enjoy the same federal protections as bank customers, including the same $20,000 insured deposit limit as the FDIC. Over the years both federal agencies have increased their deposit insurance limits, which is $250,000 today.

What’s the difference between the FDIC and NCUA?

Both the FDIC and NCUA regulate their respective banks and credit unions, offer federal deposit insurance up to $250,000 per individual, and work similarly in how they treat insured assets.

FDIC and NCUA

Will insure:

• Checking accounts
• Savings accounts
• Money Market deposit accounts
• Certificates of Deposit (CDs)
• IRA accounts for retirement

Won’t insure:

• Stocks
• Bonds
• Life insurance policies
• Annuities
• Contents of safe deposit boxes

Is there a way to get more than $250,000 insurance coverage?

The FDIC and NCUA both insure deposits according to the ownership category in which the funds are insured and how the accounts are titled. This means there are ways to structure your accounts to obtain more than $250,000 coverage, such as adding a joint account holder or putting your accounts under a trust with beneficiaries.

Both agencies have online Insurance Estimators to help consumers understand how they can structure their accounts to maximize the deposit insurance. You can visit the FDIC Estimator and the NCUA Estimator to learn more.

What if I have more than $250,000 in my accounts?

Even if you have more money than the federally insured limit at your bank or credit union, it doesn’t mean your money is unsafe. Let’s look at different scenarios.

First, it’s helpful to remember that federal insurance programs like the FDIC and NCUA are a last resort should a bank or credit union fail. If a financial institution is well managed and focused on putting customer safety before profit, it’s less likely to make risky investments.

Second, the $250,000 limit applies per individual. This means if you have a joint account with someone like a spouse, $500,000 of your money is federally insured.

Is my money safe at Stanford Federal Credit Union?

Yes! Stanford Federal Credit Union is insured by the NCUA, well managed, and always puts members first. As a member/owner, our finances are transparent and available to you online. Learn more.