Share Insurance Coverage
If you invest money in the stock market or a bond fund, you risk losing some or all of it. That's not the case with deposits in a credit union. All deposits up to $250,000 are insured by the federal government. You don't have to pay one penny for this insurance. Parkview Community Federal Credit Union foots the bill for the protection.
If you watch commercials or see advertisements for banks, you've probably heard references to the Federal Deposit Insurance Corporation, better known as the FDIC. It's the federal agency that protects the deposits of bank customers in the event of financial institution failure.
A similar federal agency, the National Credit Union Administration (NCUA), insures accounts at Parkview Community Federal Credit Union and other credit unions. The NCUA oversees the National Credit Union Share Insurance Fund, which compensates deposit account holders if a credit union closes its doors.
We know the security of your money is important to you. And so we're glad to offer additional details on how the federal deposit insurance system works.
Share Insurance Coverage
The share insurance at PCFCU is similar to deposit insurance provided by the Federal Deposit Insurance Corporation (FDIC) and the Federal Savings and Loan Insurance Corporation (FSLIC). Share accounts in federally insured credit unions are insured up to $250,000 and Individual Retirement Accounts are insured up to $250,000. These amounts are equal to the insurance protection offered by the FDIC and FSLIC.
Generally, if a credit union member has more than one account in the same insured credit union, those accounts are added together and are insured up to $250,000. There are exceptions, however. If a member has a regular share account and an Individual Retirement Account in the same credit union, each account is insured up to the maximum level. The NCUA Insurance booklet gives a more detailed explanation of insurance coverage.
Not one penny of insured shares has ever been lost by a member of a federally insured credit union. The federal insurance fund has several programs to help insured credit unions which may be experiencing problems, and liquidations or failures are usually done only as a last resort. If a federally insured credit union does fail, however, the National Credit Union Share Insurance Fund (NCUSIF) will normally make any necessary payouts within two weeks of the time the credit union closes its doors.
Insured credit unions are required to deposit and maintain 1% of their insured shares in the NCUSIF. The fund is currently at the strongest and best reserved level in its history. Historically, deposit insurance funds strive for a ratio of equity to insured savings of at least 1%. NCUSIF ratio of equity to insured savings ranges from 1.25% to 1.30%.
As a member of Parkview Community Federal Credit Union, you do not pay directly for your share insurance protection. Parkview Community Federal Credit Union pays into the NCUSIF a deposit based on the total amount of insured shares in the Credit Union.
For additional information, visit the National Credit Union Administration website.