Money Moves

Understanding NCUA insurance coverage

The National Credit Union Association (NCUA), an independent federal agency, is responsible for ensuring the safety of citizens' deposits in the event of a credit union failure in the United States. Credit unions that meet the qualifications set by the NCUA are able to offer deposit insurance for their members, ensuring a certain amount of coverage – usually up to $250,000.

Having NCUA insurance is important because it guarantees that the credit union you're considering depositing your money with is supported by the agency, giving you peace of mind. Moreover, it provides up to $250,000 per member to cover any potential shortfall if the credit union fails to meet its members' needs.

Purdue Federal Credit Union is an NCUA member, which means all of our members’ deposits are insured up to $250,000.

What you can do to maximize your insurance coverage at Purdue Federal

Being insured by the NCUA for up to $250,000 is great, but what if you have more than $250,000 with Purdue Federal? Does that mean your excess money can’t be insured?

Not necessarily. There are ways to structure your excess money in Purdue Federal accounts and keep it insured by the NCUA. You can organize your money to fall under different account categories that utilize additional insurance coverage past $250,000.

Below are the different account categories we offer at Purdue Federal that you can utilize to maximize your insurance coverage:

Single Ownership Accounts

Single ownership accounts are accounts that only have you as an owner. These can be your checking account, savings account, HSA, money market, etc. 

All of the money in your single ownership accounts is added together and the total is insured up to $250,000.

Joint Accounts

Joint accounts are accounts in which you share ownership with one or more individuals. These can be deposit accounts such as a joint checking account you share with your spouse or a joint savings account that you share with your child. 

Joint accounts are a different account category than single ownership accounts. This means your money in joint accounts can be insured separately from money in your single ownership accounts. 

Your share of the money in each of your joint accounts is added together and the total is insured up to $250,000. For instance: 

• If your joint checking account with your spouse has $200,000 in it, your share of that account would be $100,000. ($200,000 divided by 2)
• If you share a joint account with two other individuals with $150,000 in it, your share of that account would be $50,000. ($150,000 divided by 3)
• If you have a joint checking account with your spouse that holds $200,000 and another joint checking account with your child that holds $100,000, your shares of those accounts would add up to $150,000 ($200,000 divided by 2 + $100,000 divided by 2). 

Revocable Trust Accounts

A revocable trust account refers to a shared account owned by one or more individuals, which designates one or more beneficiaries to inherit the funds in the event of the owner(s) passing away. As the owner(s) of a revocable trust, you have the option to revoke, terminate or make changes to it at any time.

Each owner's share of a revocable trust account is insured up to $250,000 for each eligible beneficiary. For instance:

• If you have a revocable trust account where you are the only owner and have two beneficiaries, that money is insured up to $500,000 (1 owner x 2 beneficiaries x $250,000). 
• If you are a co-owner of a revocable trust account with your spouse and have three beneficiaries of the account, that money is insured up to $1,500,000 (2 owners x 3 beneficiaries x $250,000).

Maximization Scenario 1 - Married Couple, No Children

Let's say you are a married couple with no kids. Here's how you can organize your money at Purdue Federal into different account categories to get it all insured:

Total insured: $1,500,000

Maximization Scenario 2 - Married Couple with Children

Let's say you are a married couple with two kids. Here's how you can organize your money at Purdue Federal into different account categories to get it all insured:

Total insured: $3,500,000

To get more in-depth info on how to insure your money at a credit union, read these FAQs.

Conclusion

By understanding the different account types  and how they are insured by the NCUA, you can rest assured that your money is safe and secure. Structuring your funds at Purdue Federal Credit Union across multiple account categories allows you to maximize the insurance coverage of your deposits while having it all in one place.

Visit us in a branch or contact us to structure your accounts and get all your money insured today!