“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
All deposits at federally insured credit unions are protected by the National Credit Union Share Insurance Fund, with deposits insured up to at least $250,000 per individual depositor. Credit union members have never lost a penny of insured savings at a federally insured credit union.
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.
Is my money safe in a credit union if the economy crashes? ›
Money deposited into bank accounts will be safe as long as your financial institution is federally insured. The FDIC and National Credit Union Administration (NCUA) oversee banks and credit unions, respectively. These federal agencies also provide deposit insurance.
Do credit unions protect your money? ›
The National Credit Union Administration (NCUA) is an independent agency created by the U.S. government to regulate and protect credit unions and their owners. Just like the FDIC, the NCUA insures up to $250,000 to all credit union members and provides protection in the event of a credit union failure.
What is the downside of 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.
Can a credit union crash like a bank? ›
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.
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.
What happens if a credit union goes bust? ›
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.
Can banks seize your money if the economy fails? ›
The short answer is no. Banks cannot take your money without your permission, at least not legally. The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per account holder, per bank. If the bank fails, you will return your money to the insured limit.
Can you lose money in a credit union? ›
All deposits at federally insured credit unions are protected by the National Credit Union Share Insurance Fund, with deposits insured up to at least $250,000 per individual depositor. Credit union members have never lost a penny of insured savings at a federally insured credit union.
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.
Can the government take your money from a credit union? ›
Through right of offset, the government allows banks and credit unions to access the savings of their account holders under certain circ*mstances. This is allowed when the consumer misses a debt payment owed to that same financial institution.
Should I save money in a credit union? ›
What Are the Major Advantages of Credit Unions? Credit unions typically offer lower closing costs for home mortgage loans, and lower rates for lending, particularly with credit card and auto loan interest rates. They also have generally lower fees and higher savings rates for CDs and money market accounts.
Why do banks not like credit unions? ›
First, bankers believe it is unfair that credit unions are exempt from federal taxation while the taxes that banks pay represent a significant fraction of their earnings—33 percent last year. Second, bankers believe that credit unions have been allowed to expand far beyond their original purpose.
What is a weakness of a credit union? ›
Weaknesses of Credit Unions
The membership of a credit union is restricted to a specific community, most often a religion, profession, or geographic location. For a member to be eligible to join a credit union, they must belong to a group listed in the credit union's charter.
Should I be concerned about my credit union? ›
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).
What is the safest bank to keep your money in? ›
JPMorgan Chase, the financial institution that owns Chase Bank, topped our experts' list because it's designated as the world's most systemically important bank on the 2023 G-SIB list. This designation means it has the highest loss absorbency requirements of any bank, providing more protection against financial crisis.
Is keeping your money in a bank or credit union is safer than storing it in your dresser? ›
But as we gain surer footing with a recovering economy, you should know that there is no safer place for your money than a bank or credit union – not the proverbial mattress stuffed with cash, not the locked desk drawer in the den and not even the thick-walled safe hidden in the closet.
What is an accurate difference between a bank and a credit union? ›
The main difference between the two is that banks are typically for-profit institutions while credit unions are not-for-profit and distribute their profits among their members.
