Why are Credit Unions insured by the National Credit Union Administration (NCUA) instead of the Federal Deposit Insurance Corporation (FDIC)?

While credit unions and banks perform similar functions, they are structured very differently - credit unions are not-for-profit financial cooperatives owned by their members, created to improve the financial wellbeing of various underserved segments of the population, while banks are for-profit financial institutions. The US Chamber of Commerce defines the difference as “Members of a credit union are part owners of the institution while investors of banks are part owners and have a say in how the bank is run depending on their number of shares.” Member deposit accounts are federally insured by the National Credit Union Share Insurance Fund (NCUSIF), which is administered by the National Credit Union Administration (NCUA). The fund is backed by the full faith and credit of the U.S. government. No taxpayer funds are used to support the (NCUA) or the (NCUSIF). For more information, visit www.ncua.gov.

Through its share insurance fund, the NCUA provides all members of Golden 1 with $250,000 in coverage for their single ownership accounts. These accounts include all savings, checking, money market, and term-savings certificates. In the case of joint accounts owned by two or more people, the NCUA provides each joint account holder with $250,000 in coverage. For example, a two-person joint account has $500,000 in coverage. NCUA insurance is like FDIC insurance.

Additional NCUA share insurance may be available for members with certain kinds of trust and retirement accounts. For share insurance purposes, accounts with payable-on-death beneficiary designations are treated as revocable trust accounts. For more information, please read the NCUA’s comprehensive booklet: “How Your Accounts Are Federally Insured” available here.