Understanding FDIC and NCUA Insurance: Why It Matters for Your Savings

Keeping your money safe is a top priority, and that’s where FDIC and NCUA insurance come in. These government-backed protections ensure that your savings are secure, even if your bank or credit union fails. Learn how these protections work and why they are essential for financial peace of mind.

What Is FDIC Insurance?

The Federal Deposit Insurance Corporation (FDIC) is an independent government agency that protects depositors in case a bank fails. If your FDIC-insured bank goes out of business, the government guarantees that you won’t lose your money—up to certain limits.

Key Facts About FDIC Insurance:

• Coverage Limit: Up to $250,000 per depositor, per bank, per account category
• What’s Covered: Checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs)
• What’s Not Covered: Stocks, bonds, mutual funds, cryptocurrency, and safe deposit box contents
• Who’s Covered: Customers of FDIC-insured banks (almost all banks in the U.S. are insured)

FDIC insurance was created after the Great Depression to restore trust in the banking system, and since then, no depositor has lost insured funds due to a bank failure.

What Is NCUA Insurance?

The National Credit Union Administration (NCUA) provides similar protection for credit union members. If your federally insured credit union fails, your money is protected under the National Credit Union Share Insurance Fund (NCUSIF).

Key Facts About NCUA Insurance:

• Coverage Limit: Up to $250,000 per depositor, per credit union, per account category
• What’s Covered: Share savings accounts, checking accounts, money market accounts, and share certificates (equivalent to CDs)
• What’s Not Covered: Stocks, bonds, mutual funds, cryptocurrency, and safe deposit box contents
• Who’s Covered: Members of federally insured credit unions (most credit unions in the U.S. are NCUA-insured)

Like FDIC insurance, no one has ever lost a single dollar of insured savings in an NCUA-insured credit union.

How FDIC and NCUA Insurance Protect You

1. Prevents You from Losing Money in a Bank or Credit Union Failure

If an FDIC-insured bank or NCUA-insured credit union shuts down, you won’t lose your insured funds. Instead, the government steps in to reimburse depositors up to the coverage limit.

2. Covers a Wide Range of Deposit Accounts

Both FDIC and NCUA insurance protect standard deposit accounts, ensuring that your everyday banking needs and savings remain secure.

3. Works Automatically

You don’t need to sign up for FDIC or NCUA insurance—it’s automatic as long as you bank with an insured institution.

How to Make Sure Your Money Is Fully Insured

1. Check If Your Bank or Credit Union Is Insured

• Most major banks and credit unions are insured, but you can confirm by checking your bank’s website or using the FDIC BankFind tool or NCUA’s Credit Union Locator.

2. Stay Within Coverage Limits

• If you have less than $250,000 in an account, your money is fully covered.
• If you have more than $250,000, you can spread your funds across different banks or credit unions to ensure full coverage.

3. Use Different Account Ownership Categories

The $250,000 limit applies per depositor, per account type, meaning you can increase your insured coverage by using different ownership structures:

• Single accounts – $250,000 per person
• Joint accounts – $250,000 per owner (e.g., a couple can have $500,000 insured)
• Retirement accounts (IRAs) – Separate coverage of $250,000
• Trust accounts – Higher coverage limits based on beneficiaries

The Bottom Line

FDIC and NCUA insurance ensure that your savings remain safe, even if your bank or credit union fails. Understanding how these protections work can help you manage your money wisely and avoid unnecessary risk. Always check that your financial institution is insured, stay within coverage limits, and use different account types to maximize your protection. With these safeguards in place, you can bank with confidence, knowing your money is secure.