What is a Credit Union?

Credit unions are not-for-profit organizations that exist to serve their members. Similar to banks, credit unions accept deposits, offer loans, and provide financial services. However, at a credit union, you belong to and own part of the financial institution, which means the profits go back to you and other members in the form of lower interest rates and helpful lending solutions.

What is a Low Income Credit Union?

A low-income credit union is one in which a majority of its membership (50.01%) qualifies as low-income members as defined in Section 701.34 of the NCUA Rules and Regulations. Low-income members are those members who earn 80% or less than the median family income for the metropolitan area where they live or the national metropolitan area, whichever is greater.  Median earnings may be substituted for median family income if it is more beneficial.  

For members living outside a metropolitan area, low-income members are those members who earn 80% or less than the median family income for the statewide or national, non-metropolitan area median family income, whichever is greater. Low-income members are also those members enrolled as students in a college, university, high school, or vocational school.

NCD CU is a certified Minority Depository Institution (MDI), which means our percentage of potential minority members, current members, and board members must each exceed 50 percent.

Is My Money Safe with a Credit Union?

Federally-insured credit unions offer a safe place for you to save your money, with deposits insured up to $250,000 per individual depositor. The National Credit Union Administration (NCUA) is an independent agency that administers 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. The NCUSIF insures member savings in federally-insured credit unions, which account for about 98 percent of all credit unions in the United States.

How Do I Know if my Credit Union is Federally Insured?

All federally-insured credit unions must prominently display the official NCUA insurance sign at each teller station and where insured account deposits are normally received in their principal place of business and in all branches. Federally insured credit unions are also required to display the official sign on their Internet page, if any, where they accept deposits or open accounts. No credit union may end its federal insurance without first notifying members. 

What is Your Share Insurance Coverage?

On July 22, 2010, Congress permanently increased NCUA’s standard maximum share insurance coverage to $250,000. As a member of a federally-insured credit union, you do not pay directly for your share insurance protection. Your credit union places a deposit into the NCUSIF and pays an insurance assessment based on the total amount of insured shares and deposits in the credit union.

What does NCUA share insurance cover?

NCUA share insurance covers all types of deposits received at a federally-insured credit union, including deposits in a share draft account, share savings account, or time deposit such as a share certificate. NCUA insurance covers depositors’ accounts at each federally-insured credit union, dollar-for-dollar, including principal and any accrued interest through the date of the insured credit union’s closing, up to the insurance limit.

The NCUA does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if these non-deposit investments or insurance products are sold at a federally-insured credit union. Credit unions often provide these services to their members through third parties. The non-deposit investment and insurance products offered by third parties are not insured by the National Credit Union Share Insurance Fund (NCUSIF). In locations where non-deposit investment and insurance products are recommended or sold to members, credit unions are required to disclose that the products:

  • are not insured by the NCUA;
  • are not deposits or other obligations of the credit union, and are not guaranteed by the credit union; and,
  • are subject to investment risks, including possible loss of the principal invested.

In addition, the NCUA does not insure safe deposit boxes or their contents. The NCUA does not insure U.S. Treasury bills, bonds, or notes, but these investments are backed by the full faith and credit of the United States government.

Share accounts in federally insured credit unions are insured for up to $250,000. A depositor who has multiple deposits may qualify for more than $250,000 in share insurance coverage if the customer’s accounts are of different legal ownership and the requirements for each type of legal ownership are met.

For example, if you have a regular share account in your name alone and an Individual Retirement Account (IRA) at the same federally-insured credit union, the regular share account is insured up to $250,000, and the IRA is separately insured for up to $250,000. However, if you have a regular share account, a share certificate, and a share draft account in your name alone, those accounts would be added together and insured for up to $250,000.

A coowner’s interest in all joint accounts in the same federally-insured credit union will be added together and insured for up to $250,000. Roth IRAs will be added together with traditional IRAs and other self-directed retirement accounts and insured for up to $250,000 per depositor, per federally-insured credit union.

Coverdell Education Saving Accounts, formerly education IRAs, are insured as irrevocable trust accounts and will be added to a member’s other irrevocable trust accounts and insured for up to $250,000. Additional coverage may be available for revocable trust or payable on death accounts on a per-beneficiary basis as long as the requirements are met.

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