The primary difference between federal credit unions and non-federal credit unions is how they are insured. Otherwise, both federal credit unions and credit unions provide the same basic banking services like checking and savings accounts, loans, credit cards and other financial tools.
Federal credit unions are insured by what is known as the National Credit Union Share Insurance Fund. The NCUSIF is administered by the National Credit Union Administration, an independent agency. The National Credit Union Share Insurance Fund is a federal insurance fund backed by the United States government. Like the insurance provided by the FDIC, the NCUSIF insurance covers deposits of up to $250,000 for each individual investor.
The National Credit Union Share Insurance Fund began in 1970 to protect deposits at credit unions. Today, about 98 percent of all credit unions in the U.S. are federally insured. A credit union is not allowed to end its federal insurance without first notifying members.
There are a Few Easy Ways to Know if the Credit Union is Insured * It has the word, “federal” in the title. * Federal credit unions have headquarters in Arkansas, Delaware, South Dakota, as well as Wyoming and the District of Columbia. * A federal credit union will have the official NCUA insurance sign.
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