Is Your Credit Union NCUA-Insured?

If you’ve ever wondered whether your credit union is safe, you can rest easy knowing that your money is insured by the National Credit Union Administration or NCUA. NCUA is the government-backed insurance company for credit unions in the United States. It’s one of the two agencies that insure deposits in these institutions. But how does it work? Read on for more information. Here are some common questions you might have about NCUA.

What exactly does NCUA insure? Federally chartered credit unions automatically have their accounts insured by NCUA. The official name of such a credit union must contain the word “federal.” However, state-chartered credit unions may choose to be insured by NCUA but are regulated by the state they were chartered. You can also look for the NCUA sign at a credit union or use the Credit Union Locator to find one.

What are the differences between NCUA and FDIC? Both organizations insure deposits, but they do it differently. The FDIC insures bank accounts while NCUA covers credit union accounts. In case of a disaster, the FDIC will take responsibility for your money. If you don’t have a bank account, the FDIC can step in. But if you’re looking for a credit union, you’ll want to make sure it is insured by the NCUA.

A credit union that’s liquidated will be taken over by another federally insured credit union. Direct deposits from members of the liquidated credit union will be transferred to the assuming credit union. The NCUA will advise members to arrange a new arrangement with the new institution. You’ll still be responsible for any loans and credit card payments you’ve made to the bank or credit union. But you won’t be affected by this if your credit union is insured by NCUA.

What is NCUA? NCUA is a government agency that monitors the safety of the credit union system. Its most significant responsibility is the National Credit Union Share Insurance Fund. This fund uses tax dollars to protect the savings of members of federally insured credit unions. However, there are state-chartered credit unions that opt for NCUA insurance, too. When choosing a credit union, be sure to look for the NCUA logo and check whether they are federally insured or not.

Moreover, NCUA must assess a premium from a credit union when the equity ratio of the institution falls below a certain level. If the equity ratio is between 1.20 percent and 1.30 percent, NCUA has the discretion to impose a premium on the credit union. Since 1984, NCUA has assessed the Share Insurance Fund premium three times. Moreover, NCUA is required to devise a plan for the restoration of the Fund.

NCUA is an independent federal agency that oversees the safety and stability of federally insured credit unions. It is the administrator of the National Credit Union Share Insurance Fund (NCUSIF), which insures the savings of account holders in all federally insured credit unions. The NCUA also provides financial literacy resources and tools for consumers. A good credit union chartering guide is provided by the NCUA. You can read more about how the agency works and what the responsibilities of the NCUA are at bestfriendscredit.com