“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
Why are credit unions safer than banks? Like banks, which are federally insured by the FDIC, credit unions are insured by the NCUA, making them just as safe as banks. The National Credit Union Administration is a US government agency that regulates and supervises credit unions.
Is my money safer in a credit union or 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 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.
What happens if a credit union fails? ›
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.
Where is the safest place to keep your money? ›
Where Is the Safest Place To Keep Cash? Deposit accounts—like savings accounts, CDs, MMAs, and checking accounts—are a safe place to keep money because consumer deposits are insured for up to $250,000, either by the FDIC or NCUA.
Are credit unions safe from collapse? ›
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.
Is it better to put your money in a bank or credit union? ›
Credit unions tend to offer lower rates and fees as well as more personalized customer service. However, banks may offer more variety in loans and other financial products and may have larger networks that can make banking more convenient.
What are some negatives of a credit union? ›
Cons of credit unions
- Membership required. Credit unions require their customers to be members. ...
- Not the best rates. ...
- Limited accessibility. ...
- May offer fewer products and services.
Some people wonder where the best place to store their money is to protect its value amid economic uncertainty. One way to ensure your money stays safe is to deposit it in a credit union. Credit unions protect members' finances, whatever the market conditions are, including during a recession.
Is it safe to leave money in credit union? ›
Like banks, which are federally insured by the FDIC, credit unions are insured by the NCUA, making them just as safe as banks. The National Credit Union Administration is a US government agency that regulates and supervises credit unions.
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.
Has anyone ever lost money in a credit union? ›
“Not one penny of insured savings has ever been lost by a member of a federally insured credit union.”
Which bank is least likely to go bust? ›
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.
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.
Where do millionaires keep their money? ›
Cash equivalents are financial instruments that are almost as liquid as cash and are popular investments for millionaires. Examples of cash equivalents are money market mutual funds, certificates of deposit, commercial paper and Treasury bills. Some millionaires keep their cash in Treasury bills.
Can banks seize your money if the economy fails? ›
Banks during recessions FAQs
Your money is safe in a bank, even during an economic decline like a recession. Up to $250,000 per depositor, per account ownership category, is protected by the FDIC or NCUA at a federally insured financial institution.
What is the downside of banking with a credit union? ›
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. May offer fewer products and services.
How secure is 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).
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.
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.
