What is the maximum amount of money protected in a single account by the NCUA?

If you guessed B) $250,000, you’re correct!

The NCUA (National Credit Union Association) insures deposits up to $250,000 per depositor, per insured credit union, per ownership category. But what exactly does that mean, and how does it affect your money? Today, we are going to break down this topic, Understanding NCUA Insurance.

First, what is the NCUA? The NCUA is an independent agency of the U.S. government that is responsible for regulating, chartering, and supervising federal credit unions, and protects depositors in the unlikely event a credit union fails. The FDIC (Federal Deposit Insurance Corporation) was established in 1933, in response to the thousands of bank failures that occurred during the Great Depression when U.S. citizens lost the funds they THOUGHT were being kept safe in the banks. The NCUA was established in 1970 to offer similar protection to credit union members. Since then, not a single penny of insured funds has been lost by a credit union member.

That’s great news! But now we need to take a look at what is covered by the NCUA and what is not. NCUA insurance covers most types of deposit accounts, including:

  • Checking accounts

  • Savings accounts

  • Money Market accounts

  • Certificates

NCUA insurance does not cover:

  • Stocks

  • Bonds

  • Mutual funds

  • Crypto assets

  • Life insurance policies

  • Contents of safe deposit boxes

What does “Per Depositor, Per Institution, Per Ownership Category” mean? This is where it gets a little more technical, but it is important to understand.

Per Depositor: The $250,000 limit applies to each individual depositor. Per Institution: If you have accounts at more than one NCUA-insured credit union, each CU provides its own separate $250,000 coverage. Per Ownership Category: NCUA insurance also applies separately to different ownership categories, such as individual accounts, joint accounts, retirement accounts, and trusts.

For example, if you have $250,000 in an individual savings account and $250,000 in a joint checking account with your spouse at the same credit union, you are fully insured for both accounts because they fall into different ownership categories.

What if you have more than $250,000? There are ways to increase your insured coverage:

  • Spread your money across multiple NCUA-insured banks.

  • Open accounts under different ownership categories (like in the example above).

  • Use accounts designed to provide expanded insurance, like those offered through CDARS (Certificate of Deposit Account Registry Service) or IntraFi.

In summary, understanding how NCUA insurance works is an essential part of managing your money wisely. While $250,000 is the standard limit, smart structuring of your accounts can help you safeguard even more. If you have questions about your specific situation, talk with us. We will help you make sure your money is protected. If you want help reviewing your account coverage or have any other questions, just give us a call!

Cayla Albrecht