Nov 11, 2022 / Security
Most people know that the National Credit Union Administration (NCUA) automatically insures savings accounts at federally insured credit unions, up to $250,000, at no cost to you. But did you know that your coverage may extend above and beyond that amount, depending on your individual savings circumstances. You can maximize your NCUA coverage at Utah First by diversifying the types of accounts you have and how those accounts are owned.
The NCUA is a government agency that monitors federal credit unions across the country. Among other responsibilities, the NCUA automatically insures up to $250,000 of aggregate savings for each individual member at every federally insured credit union, including Utah First. According to the NCUA, credit union members have never lost a penny of insured savings at a federally insured credit union.
Your $250,000 coverage includes the sum total of your savings accounts—money market accounts, checking accounts, and term deposit accounts combined. The NCUA also provides additional, automatic coverage for other types of accounts, including retirement accounts, joint accounts, and trust accounts.
The NCUA provides additional insurance coverage of up to $250,000 for IRA accounts. That means you can have a combination of savings accounts (with deposits of up to $250,000) and a combination of Traditional IRA and Roth IRA accounts (totaling up to $250,000) and still be 100% insured by NCUA.
Accounts owned by two or more individuals, each with equal rights to withdraw money, are insured up to $250,000 by NCUA for each joint account member.
That means couples can open a joint account and enjoy coverage of up to $500,000. It also means three trusted friends or family members can open a joint account and enjoy up to $750,000 coverage. That’s in addition to any savings accounts each joint account holder may own individually.
For example, a married couple may have a combined $500,000 of savings in a joint account. The husband may also have a total of $250,000 in an individual money market account, and the wife may have $250,000 in an individual term deposit account. All of their money, in the joint and individual accounts, would be totally insured by NCUA.
Revocable trust accounts (sometimes called payable on death accounts) that list beneficiaries to be paid upon the death of the account owner are insured by NCUA up to $250,000 per eligible beneficiary. In these cases, insurance is provided to the owner of the revocable trust or payable on death account.
If an individual account holder had more than the maximum insured amount in various savings accounts, he or she could maximize NCUA coverage by opening a payable on death account. If the account listed two eligible beneficiaries, the account owner would be insured for up to $500,000 on that account. Again, that’s in addition to any coverage for individual savings accounts.
In lieu of (or in addition to) payable on death accounts, you may choose to maximize your NCUA insurance coverage by opening savings accounts for your kids. If you have exceeded your insurance coverage limit on any other account, you can open an account for your kids and enjoy up to $250,000 coverage per individual account holder.
When you diversify your account and ownership types at Utah First, you can rest assured that your money is safe and that you’ve made financially sound decisions to maximize your NCUA coverage. If you have questions about how to get the most coverage for your accounts, reach out to a member of our team or stop by a branch location.