News about bank failures can cause panic and anxiety. After all, we work hard for our money and can’t help wondering if our money is safe at our local financial institution. Here is a quick summary of how your money is protected.
Nymeo is not a bank but a credit union. Credit unions are financial institutions that operate similarly to banks, but they are owned by their members, like you, and operate on a not-for-profit basis. The National Credit Union Administration (NCUA) is a federal agency that regulates credit unions and ensures their safety and soundness. First, let’s explain about banks.
How Money is Protected at Banks
- When you place money in a bank account, you’re considered a depositor for the bank. If the bank is FDIC-insured, you automatically receive up to $250,000 in insurance protection.
- What that means is if the bank fails, the FDIC will reimburse up to $250,000 of losses.
How Money is Protected at Credit Unions – like Nymeo
- To protect the money held at credit unions, the NCUA provides deposit insurance through the National Credit Union Share Insurance Fund (NCUSIF).
- The NCUSIF is like the FDIC, which again provides deposit insurance for banks.
- The NCUSIF covers up to $250,000 of the total balance of individuals’ credit union accounts. For jointly owned accounts, the NCUSIF insures an additional $250,000 for each account holder. Joint account insurance is separate from insurance for single ownership accounts.
Example: if Fred is married to Mary and they jointly own a savings account, that savings account is insured up to $500,000 — $250,000 for each account holder. Since Fred has a total of $250,000 in his single ownership accounts, he will still be insured that amount regardless of how much money is in the joint savings account. With the single ownership accounts and the joint account combined, Fred has up to $750,000 federally insured.
- Not one penny of insured savings has ever been lost by a member of a federally insured credit union.
What Happens if You Have More Than $250,000 in Deposits?
If you need insurance on higher amounts, it is available. This insurance means that your savings are backed by the full faith and credit of the United States government. You can keep track of your insured coverage limits by using the Share Insurance Estimator Calculator.
For additional information about share insurance accounts and maximizing share insurance coverage, please watch this educational video provided by the NCUA.
Are Investments Insured?
Keep in mind that investments are not insured either by the FDIC or NCUA. If you have questions or concerns, it’s advised to speak with a financial advisor.
As always, we want our members to have peace of mind that your funds are safe at Nymeo. If you have questions or concerns, please feel free to reach out to us.
Category: Financial Literacy & Safety
