“Not one penny of insured savings has ever been lost by a member of a federally insured credit union.”
—National Credit Union Administration
When things are uncertain, thinking more about the safety and security of your home, family, and finances is natural. Like most essential things in your life, the money you deposit at WeStreet Credit Union is protected by a type of insurance.
You may have heard that most banks are FDIC-insured. The FDIC is a federal institution that was created to ensure that customers don’t lose money if an FDIC member bank fails.
Similarly, the National Credit Union Administration (NCUA) insures deposits at participating credit unions up to at least $250,000 per individual depositor. To estimate how much your deposits are insured for, you can use theShare Insurance Estimatorcreated by the NCUA.
The NCUA administers the fund is called the National Credit Union Share Insurance Fund (NCUSIF). Like the FDIC’s Deposit Insurance Fund, the NCUSIF is a federal insurance fund backed by the full faith and credit of the United States government.
Since the fund was created, no one at an NCUA member credit union has ever lost a penny of insured savings. For complete details about Share Insurance,visit the NCUA website.
Which is Safer, a Bank or a Credit Union?
As long as you are banking at a federally insured institution, whether it is a credit union insured by the NCUA or a bank by the FDIC, your money is equally safe.
Credit unions are owned by the members—your savings account at a credit union is a share of ownership. So many choose to deposit with credit unions because they prefer to work with a financial institution that is focused on serving its members rather than increasing its stock price.
Before joining a financial institution, look into the financial health of the institution to ensure it has a strong foundation. You can research credit unions on the NCUA website to verify their assets, number of members, and founding date.
This article is for educational purposes only. WeStreet Credit Union makes no representations as to the accuracy, completeness, or specific suitability of any information presented. Information provided should not be relied on or interpreted as legal, tax or financial advice. Nor does the information directly relate to our products and/or services terms and conditions.
FAQs
Credit unions are federally insured by the National Credit Union Share Insurance Fund (NCUSIF), which is backed by the full faith and credit of the U.S. government. The bank equivalent is the (more widely known) Federal Deposit Insurance Corporation (FDIC).
How safe is your money in a credit union? ›
Just like banks, credit unions are federally insured; however, credit unions are not insured by the Federal Deposit Insurance Corporation (FDIC). Instead, the National Credit Union Administration (NCUA) is the federal insurer of credit unions, making them just as safe as traditional banks.
Should I keep all my money in a credit union? ›
Federally insured credit unions and banks are both safe places to keep your money. The National Credit Union Administration protects deposits (within certain limits) at insured credit unions and the Federal Deposit Insurance Corp. protects deposits (within certain limits) at insured banks.
How much of my money is protected in a credit union? ›
Federally insured credit unions offer a safe place for you to save your money, with deposits insured up to at least $250,000 per individual depositor. The National Credit Union Administration (NCUA) is the independent agency that administers the NCUSIF.
What is the downside of banking with a credit union? ›
Limited accessibility. Credit unions tend to have fewer branches than traditional banks. A credit union may not be close to where you live or work, which could be a problem unless your credit union is part of a shared branch network and/or a large ATM network such as Allpoint or MoneyPass.
What happens if a credit union fails? ›
If a credit union is placed into liquidation, the NCUA's Asset Management and Assistance Center (AMAC) will oversee the liquidation and set up an asset management estate (AME) to manage assets, settle members' insurance claims, and attempt to recover value from the closed credit union's assets.
Is it good to put your savings in a credit union? ›
Yes! Most credit unions are insured like banks but by the NCUA. All federally insured credit unions will have the NCUA logo displayed on their website as well as where deposits are received.
Are credit unions safe from collapse? ›
Credit unions are insured by the National Credit Union Administration (NCUA). Just like the FDIC insures up to $250,000 for individuals' accounts of a bank, the NCUA insures up to $250,000 for individuals' accounts of a credit union. Beyond that amount, the bank or credit union takes an uninsured risk.
Should I worry about my money in a credit union? ›
Money held in credit union accounts is insured through the National Credit Union Administration (NCUA). Many types of accounts are covered by insurance such as checking, savings, certificates of deposit, money market accounts, and others.
Is it safer to put your money in a credit union than a bank? ›
However, because credit unions serve mostly individuals and small businesses (rather than large investors) and are known to take fewer risks, credit unions are generally viewed as safer than banks in the event of a collapse. Regardless, both types of financial institutions are equally protected.
bank in a recession, the credit union is likely to fare a little better. Both can be hit hard by tough economic conditions, but credit unions were statistically less likely to fail during the Great Recession. But no matter which you go with, you shouldn't worry about losing money.
Can a credit union fail? ›
Experts told us that credit unions do fail, like banks (which are also generally safe), but rarely. And deposits up to $250,000 at federally insured credit unions are guaranteed, just as they are at banks.
Which is safer FDIC or NCUA? ›
One of the only differences between NCUA and FDIC coverage is that the FDIC will also insure cashier's checks and money orders. Otherwise, banks and credit unions are equally protected, and your deposit accounts are safe with either option.
What are three cons of a credit union? ›
The downside of credit unions include: the eligibility requirements for membership and the payment of a member fee, fewer products and services and limited branches and ATM's.
Why do banks not like credit unions? ›
For decades, bankers have objected to the tax breaks and sponsor subsidies enjoyed by credit unions and not available to banks. Because such challenges haven't slowed down the growth of credit unions, banks continue to look for other reasons to allege unfair competition.
Will credit unions fail like banks? ›
It is important to note that credit unions can fail, and have, even prior to the current banking crisis. However, their depositors are made whole from payouts from the NCUA insurance fund.
Is money safer in a bank or credit union? ›
Generally, credit unions are viewed as safer than banks, although deposits at both types of financial institutions are usually insured at the same dollar amounts. The FDIC insures deposits at most banks, and the NCUA insures deposits at most credit unions.
Why keep your money in a credit union? ›
Credit unions operate to promote the well-being of their members. Profits made by credit unions are returned back to members in the form of reduced fees, higher savings rates and lower loan rates.
