“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
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 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? ›
Your money is safer in a Credit Unions hands because all accounts are federally insured up to $250,000 and backed by the U.S. government.
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.
Are credit unions safe in banking crisis? ›
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.
What happens if a credit union fails? ›
The credit union can resolve its operational problems and be returned to member ownership; The credit union can merge with another credit union; or. The NCUA can liquidate the credit union.
Should I keep my money in a bank or credit union? ›
If you want higher deposit rates and don't need access to branches across the country, for example, you might prefer a credit union. If you want access to in-person services and don't mind lower interest rates, a bank might be more suitable.
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 my money safer in a credit union than a bank? ›
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.
Should I move my money from bank to credit union? ›
A large national bank may charge $5, $10, or even $25 per month as an account maintenance fee whereas a credit union can offer free checking without any monthly maintenance fees. As far as rates go, credit unions on average will have higher deposit rates and lower rates on loans.
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.
Are credit unions safer than banks during a recession? ›
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.
Are any credit unions in financial trouble? ›
National Credit Union Administration (NCUA) credit unions had seven conservatorships/liquidations in 2022 and two so far in 2023. While credit unions have experienced several failures in 2022, there were no Federal Deposit Insurance Corp.
What is a threat to credit unions? ›
Cyberattacks are one of the greatest threats financial institutions face. The average financial security breach costs approximately $5.97 million. For credit union cybersecurity, this means keeping up to date with the latest cyber solutions is critical to protecting member data and their good name.
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.
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.
Should I keep my savings in a credit union? ›
These days, credit unions are safe and secure, having been insured by the government for over 50 years. Credit unions are a popular place for savings accounts because they often offer more favorable interest rates on both loans and savings accounts.
