Credit unions are insured through the National Credit Union Administration, an independent federal agency that guarantees member deposits up to $250,000 per member, per ownership category, at each federally insured credit union. That coverage comes from the National Credit Union Share Insurance Fund and is backed by the full faith and credit of the United States government, the same guarantee that stands behind FDIC-insured bank deposits.1National Credit Union Administration. Mission and Values No member of a federally insured credit union has ever lost insured deposits in a failure.2National Credit Union Administration. Credit Union Conservatorship and Liquidation
Who Provides the Insurance
The NCUA charters and regulates federal credit unions and insures the overwhelming majority of state-chartered credit unions as well.3National Credit Union Administration. About NCUA Federal law requires every federal credit union to carry share insurance; state-chartered credit unions may apply for it.4Office of the Law Revision Counsel. 12 USC 1781 – Insurance of Member Accounts
Insured credit unions pay into the Share Insurance Fund through a required deposit equal to one percent of their insured shares, plus assessments when needed. Federal law requires the fund to hold an equity ratio between 1.2 and 1.5 percent of total insured shares, and the NCUA Board can charge premiums to restore the ratio if it drops below 1.3 percent.5eCFR. 12 CFR 741.4 – Insurance Premium and One Percent Deposit The practical result: the fund is capitalized by the industry it insures, invested in Treasury securities, and backstopped by the federal government.6Office of the Law Revision Counsel. 12 USC 1783 – National Credit Union Share Insurance Fund
The $250,000 Coverage Limit
The standard coverage amount is $250,000 per share owner, per insured credit union, for each account ownership category. The Dodd-Frank Act of 2010 made this amount permanent.7National Credit Union Administration. Credit Union Share Insurance Brochure Two features of that sentence do most of the work.
The first is “per insured credit union.” If you hold accounts at two different federally insured credit unions, each institution provides its own separate $250,000 of coverage in each category. Splitting a large balance between two credit unions is the simplest way to double your protection.
The second is “per ownership category.” Balances at one credit union are combined within a category, but categories are insured separately. A single member with money in more than one category at the same credit union can be insured for well above $250,000 in total.
Ownership Categories That Multiply Coverage
The NCUA recognizes several account ownership categories, each with its own $250,000 limit at each insured credit union.8National Credit Union Administration. Share Insurance Coverage
Single Ownership Accounts
Any account owned by one person with no beneficiaries falls here. Regular savings, checking (share draft), money market, and share certificate balances are added together and insured up to $250,000 in combined value.
Joint Ownership Accounts
When two or more people own an account together with no named beneficiaries, each co-owner’s interest is insured up to $250,000. A joint account owned by two people is therefore covered up to $500,000. Each co-owner’s interests in all joint accounts at the same credit union are combined against their individual limit. The primary account holder must be a member of the credit union.
Retirement Accounts
Traditional and Roth IRAs at the same credit union are added together and insured up to $250,000. Keogh accounts get their own separate $250,000 of coverage.7National Credit Union Administration. Credit Union Share Insurance Brochure Retirement coverage is separate from single and joint account limits, so a member with $250,000 in personal savings and $250,000 in an IRA at the same credit union has all $500,000 insured.
Trust Accounts
Revocable trust accounts, including payable-on-death and in-trust-for designations, are insured up to $250,000 per eligible beneficiary. Irrevocable trusts receive separate coverage based on each beneficiary’s interest. A major simplification of the trust rules takes effect December 1, 2026, discussed below.
Business and Entity Accounts
Deposits held by a corporation, partnership, or unincorporated association are insured up to $250,000 separately from the personal accounts of the owners, provided the entity is engaged in an independent activity rather than existing solely to expand insurance coverage.9National Credit Union Administration. Frequently Asked Questions About Share Insurance
Sole proprietorships are the trap here. A sole proprietorship’s deposits do not receive their own coverage. The balance is added to the owner’s personal single-ownership accounts and the combined total is insured up to $250,000. If you run a sole proprietorship and also keep personal savings at the same credit union, that aggregation can push you over the limit without your realizing it.
Custodial Accounts for Minors
Funds held by a guardian or custodian for a minor under the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act are insured up to $250,000 as a single-ownership account, separate from other accounts held by the guardian, the custodian, or the minor in their own names.10eCFR. 12 CFR Part 745 Subpart A – Clarification and Definition of Account Insurance Coverage
Trust Account Rule Changes Effective December 2026
On December 1, 2026, a simplified trust rule takes effect that merges the revocable and irrevocable trust categories into a single trust accounts category.11Federal Register. Simplification of Share Insurance Rules Each trust owner’s deposits will be insured for $250,000 multiplied by the number of unique primary beneficiaries, up to a maximum of five beneficiaries. That creates a hard cap of $1,250,000 per trust owner at each insured credit union.12MyCreditUnion.gov. Trust Rule Fact Sheet – Changes in NCUA Share Insurance Coverage
- 1 beneficiary: $250,000
- 2 beneficiaries: $500,000
- 3 beneficiaries: $750,000
- 4 beneficiaries: $1,000,000
- 5 or more beneficiaries: $1,250,000
Only primary beneficiaries count. Contingent beneficiaries, who would inherit only if a primary beneficiary is deceased, are excluded from the calculation. If you hold a trust account with more than five named beneficiaries, the old rules may have provided greater coverage in some configurations, so it is worth reviewing your account structure before the effective date.
What Share Insurance Does Not Cover
Share insurance covers the deposit products at the core of most credit union relationships: savings, checking (share drafts), money market accounts, and share certificates. Anything you can deposit into and earn dividends on is almost certainly insured.
Investment products are not. Stocks, bonds, mutual funds, variable annuities, and life insurance policies fall outside the fund’s protection, even when purchased from a representative sitting in the credit union lobby. Federal rules require credit unions to disclose in writing that these products are not federally insured, are not obligations of the credit union, are not guaranteed by the credit union, and involve investment risk.13National Credit Union Administration. Sales of Nondeposit Investments Take that language seriously when you see it.
How NCUA Insurance Compares to FDIC Insurance
The FDIC insures deposits at banks; the NCUA insures shares at credit unions. The coverage amount is identical at $250,000 per depositor, per institution, per ownership category, and both are backed by the full faith and credit of the United States government.1National Credit Union Administration. Mission and Values The ownership categories are structured similarly across the two agencies. The main difference is terminology: banks hold “deposits,” credit unions hold “shares,” and the NCUA’s program is technically share insurance rather than deposit insurance. The federal guarantee behind your money is the same either way.
What Happens If a Credit Union Fails
When a federally insured credit union is closed involuntarily, the NCUA steps in as liquidating agent. Federal law directs the agency to pay insured deposits as soon as possible, either through a direct cash payment or by transferring the accounts to another insured credit union in the same community.14Office of the Law Revision Counsel. 12 USC 1787 – Payment of Insurance Members receive written instructions from the NCUA on how to recover their funds, with separate guidance for IRA and Keogh holders because of the tax rules governing retirement account transfers.15National Credit Union Administration. Information for Members and Creditors
Any balance above the $250,000 limit within a category is not guaranteed. Uninsured amounts may receive a partial recovery from the liquidation of the failed credit union’s remaining assets, but that recovery is not federally guaranteed.
Six-Month Grace Period After a Member’s Death
When a member dies, insurance coverage on their accounts continues at its existing level for six months, giving surviving family members time to restructure without losing coverage. If accounts are not restructured within that window, coverage is recalculated based on actual ownership at that point. The grace period will never reduce coverage below what it would otherwise have been.16eCFR. 12 CFR 745.2 – General Principles Applicable to Insurance Coverage The rule matters most for joint accounts: if one spouse dies and a joint account held $400,000, the full amount stays insured during the six months even though a lone surviving owner would ordinarily be covered up to $250,000.
How to Verify Your Credit Union Is Federally Insured
Every federally insured credit union must display the official NCUA insurance sign at each teller station and on any website where members can open accounts or make deposits.17eCFR. 12 CFR 740.4 – Requirements for the Official Sign Advertisements must include an official statement such as “Federally insured by NCUA” or “Insured by NCUA.”18eCFR. 12 CFR 740.5 – Requirements for the Official Advertising Statement If you don’t see that signage or language, ask before opening an account.
Two tools on the NCUA’s website go further. The Research a Credit Union database confirms any credit union’s insurance status and shows its financial data. The Share Insurance Estimator lets you enter your specific account balances and ownership structures to calculate exactly how much is insured and whether any portion exceeds the limits.19National Credit Union Administration. NCUA Homepage Running your accounts through the estimator once a year, or after any large deposit, is worth the few minutes it takes.
Privately Insured Credit Unions
A small number of state-chartered credit unions carry private insurance instead of federal coverage. The largest private insurer is American Share Insurance, which covers more than 1.25 million members and over $19 billion in deposits. Private insurance may offer similar dollar limits, but the deposits are not backed by the U.S. Treasury; any payout after a failure depends on the private insurer’s reserves. State laws govern the disclosures a privately insured credit union must make. If you’re unsure which type of insurance your credit union carries, the NCUA’s Research a Credit Union tool settles it: a credit union that does not appear there is not federally insured.