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 brochure gives
a more detailed explanation of your insurance coverage.
Credit unions that are insured by the NCUSIF must display in
their offices the official NCUA insurance sign which appears on the cover of
this brochure. All federal credit unions must be insured by NCUA, 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 federal insurance fund has several programs
to help insured credit unions which may be experiencing problems. Liquidations
or failures are a last resort. If a federally insured credit union does fail,
however, the NCUSIF will make any necessary payouts to the credit unionís
members. These payouts are usually done within 3 days from the time the credit
union closes its doors.
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. Insured credit unions are required to deposit and
maintain one percent of their insured shares and deposits in the NCUSIF.The
NCUSIF is backed by the full faith and credit of the United States government.
Notice About Your Accounts
Most properly established share accounts in federally insured credit unions
are insured up to the Standard Maximum Share Insurance Amount (SMSIA), which is
$100,000 as of April 2006, but may be increased in the future. Recent
legislation has increased the insurance coverage on certain retirement accounts,
such as IRAs and Keoghs, up to $250,000. Generally, if a credit union member has
more than one account in the same credit union, those accounts are added
together and insured in the aggregate. There are exceptions, though. You may
obtain additional separate 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 Retirement Account (IRA) at the same
credit union, the regular share account is insured up to $100,000 and the IRA is
separately insured up to $250,000. However, if you have a regular share account,
a share certificate, and a 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. Additionally, shares denominated in
foreign currencies are insured as outlined in NCUA Rules and Regulations.
Coverdell Education Saving Accounts, formerly education IRAs, are insured as
irrevocable trust accounts and will be added to a memberís other irrevocable
trust accounts and insured up to the SMSIA. Roth IRAs will be added together
with traditional IRAs and insured up to $250,000.
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-ownerís interest in
all joint accounts in the same credit union will be added together and insured
up to the SMSIA.
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