Most likely, you’ve heard of the FDIC, but not many are aware or heard of the NCUA. While both play an important role in protecting your finances they are unique in their own ways.
The Federal Deposit Insurance Corporation is an independent government agency that protects the customers’ deposits in banks and thrift institutions in case the bank fails. The FDIC bankers’ insurance covers all deposit accounts, including checking, savings, certificates of deposit and money market accounts up to $250,000 per account.
The National Credit Union Share Insurance Fund is similar to the FDIC in that it protects individual accounts up to $250,000. A major difference that separates the two is that the NCUA insurance covers regular shares and share draft accounts which are unique to credit unions and do not exist with banks. However, they both cover the same amount and covers different accounts. If you’re interested, keep reading and learn which one is safer for your specific needs!
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| HSBC Premier checking account: Earn $450 bonus for eligible new customers who open a new HSBC Premier checking account and complete the following qualifying activities. Make recurring monthly Direct Deposits totaling at least $5,000. Member FDIC Terms |
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NCUA vs FDIC Insurance
- The FDIC insures qualifying accounts up to the limit per depositor, per institution. That means if you hold two accounts at one bank, both with balances that meet the maximum insurance amount, only half of your money is protected.
- Even if your account has bank insurance, it doesn’t necessarily mean that all of your accounts are protected even if the amount is under $250,000. The FDIC won’t insure other products that your bank may offer.
- Both the FDIC and the NCUA does not insure money invested in:
- Bonds
- Stocks
- Mutual Funds
- Life Insurance policies
- Annuities
- Only federal credit unions are automatically covered by NCUA insurance and some state institutions are not insured by the NCUA. So they do not offer you the same protection in the case of your credit union failing.
NCUA vs FDIC Similarities
- They both cover up to the amount of $250,000 on eligible accounts
- Not all credit unions are covered by NCUA and not all banks are covered by the FDIC, therefore make sure to contact your bank to ensure that your funds are protected
- Neither of them are funded by tax dollars
| NCUA: | FDIC: |
|---|---|
| Applies to banks | Applies to credit unions |
| Insures $250,000 per person, per institution, per ownership category | Insures $250,000 per person, per institution, per ownership category |
| Covers deposit accounts: checking, savings, money market deposit accounts, and CDs | Covers: Savings accounts, share draft (checking) accounts, certificates of deposit and money market accounts |
Bottom Line
Above we have listed the general points which explained whether the FDIC or NCUA insurance is “safer”. In conclusion, both cover the same amount and it really depends on whether you are banking with a credit union or a bank. It comes down to what your needs are and which accounts you want to be insured.
As explained above, not all banks or credit unions are covered, therefore it is recommended that you contact your institution ensure that your money is properly protected. Also, don’t forget to read our full listing of Credit Unions Anyone Can Join ,Credit Unions vs. Banks Comparison, and also check out the latest Bank Bonuses nationwide for all your banking needs!
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ncua primarily insures credit unions not banks.