“Hey Dad, my friend wants to know is their money safe in a Credit Union?”

Well kids, it depends:

Their money is safe in any Credit Union, that has “NCUA” insurance.  

The National Credit Union Administration (NCUA) is a federal agency created by Congress to regulate Credit Unions.  It ensures that money deposited by you, the “depositor”, stays safe, in the event your Credit Union goes under.  This has been true since NCUA insurance was created in 1970. 

Now, back to, “it depends”.  The government requires that all federally chartered Credit Unions carry NCUA insurance.  As you may have guessed by now, not all Credit Unions carry NCUA insurance.  Understand that there are some state chartered Credit Unions that purchase private insurance to cover their depositors money instead of NCUA insurance.

NCUA insurance, like FDIC Insurance, only insures deposits up to $250,000 per depositor.  Also, like FDIC Insurance, NCUA coverage extends to checking, savings, money market accounts, and certificates of deposit (CD).

Question:  What happens if your Credit Union goes under? 

Answer:  Before a Credit Union fails, the NCUA will first try to sell its deposits and loans to another Credit Union.  If the sale is successful, customers’ accounts are transferred to the other Credit Union.  If the sale is not successful, the NCUA will send customers a check for the insured balance of their deposits, within a few days of the Credit Union’s closing.

It is probably a good idea to verify and/or document your account balances on all of your financial accounts, on a regular basis (monthly).  You wouldn’t want to get a check from the NCUA for $100, if you had $1,000 in a Credit Union that went “belly up”, that had NCUA insurance.

You have access to your account statements at the end of every month, either online or received in the mail. Scan them, download them, file them in a shoebox…whatever it takes! 

“Always know how much money you have and where it is!”

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