You might wonder if it’s safer to hold deposits at a bank than at a credit union. In truth, as long as the institution holds insurance, your money is generally safe at either type of institution.
The safest insurance available comes from the U.S. government.
- For bank accounts, the Federal Deposit Insurance Corporation (FDIC) insures funds with government backing.8
- At federal and most state-charted credit unions, the National Credit Union Share Insurance Fund (NCUSIF) protects you with the full faith and credit of the U.S. government.9
If an institution goes under, some or all of your money may be insured, meaning lost funds will be replaced. In most cases, your account will end up at a new institution, and you’ll keep the same account number and account balance as before.10
Under current law, both FDIC and NCUSIF coverage protect up to $250,000 per depositor, per institution. If you have more than that amount to manage, spread your funds among different account registrations or different institutions. It’s also possible to have more than $250,000 insured in one place if you have accounts in different ownership categories.11 For example, your retirement account and your individual checking account at the same institution might be counted separately.
A minority of credit unions offer private insurance coverage, mainly through the company American Share Insurance.