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NCUA vs. FDIC: Comparing protection for your deposit accounts

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You want to find banks and credit unions you can trust, even in times of economic uncertainty. Many deposit accounts include either FDIC or NCUA safeguards, and many people assume that one is somehow "better" or "safer" than the other.

In short, they mainly have the same protections. But by understanding how banks and credit unions protect your money, you can make more informed choices about how to save, grow and protect your wealth.

What is FDIC insurance?

The Federal Deposit Insurance Corporation (FDIC) was created in 1933 to help banking customers deposit their savings without fear of a bank run or market collapse. The economy tends to perform better when people can save money with confidence, and this insurance can protect your money in the rare event that a bank might fail.

These protections were only for banks, though, until a similar initiative began for credit unions.

What is NCUA insurance?

The National Credit Union Administration (NCUA) was created in 1970 to offer protections similar to FDIC insurance, but to credit union members.

Many people like to be members of local credit unions due to the perks they gain—from helpful services to competitive interest rates. Insuring these accounts helps people choose between credit unions and banks based on individual benefits, rather than a fear they could lose their deposits.

How NCUA vs. FDIC protections compare

Most FDIC and NCUA insurance protections are very similar. The standard insurance amount is $250,000 per depositor, per financial institution and for each account ownership category. So you could hypothetically have $150,000 each in two different savings accounts, but only $250,000 would be insured, not the full $300,000. If you put one of those savings accounts in another financial institution, you'd be insured up to $250,000 for each financial institution, or $500,000 total.

A small minority of banks do not carry FDIC insurance, and a few state-chartered credit unions don't carry NCUA insurance. But all federal credit unions carry NCUA insurance. It's also important to remember that both types of insurance exclude a variety of money invested in things like mutual funds, stocks, bonds, life insurance and annuities. Some of these products are covered by SIPC protection instead.

At a glance: NCUA vs. FDIC protections

Federally insured credit unions under the NCUA
Federally insured banks under the FDIC

Types of accounts covered

Checking accounts, savings accounts, money market accounts, share certificate accounts and CDs, certain IRAs, revocable and irrevocable trust accounts

Checking and savings accounts, money market deposit accounts, CDs, cashier's checks and money orders, NOW accounts (negotiable order of withdrawal), revocable and irrevocable trust accounts

Coverage per account, per ownership category

$250,000 for individual accounts, $250,000 per owner on joint accounts

$250,000 for individual accounts, $250,000 per owner on joint accounts

Excluded accounts (no insurance provided)

Life insurance policies, stocks, bonds, mutual funds and annuities, as well as safe deposit boxes and their contents

Life insurance policies, stocks, bonds, mutual funds and annuities, as well as safe deposit boxes and their contents

Is NCUA protection as good as FDIC?

If you're trying to determine if the NCUA is as safe as the FDIC or whether there are differences in the FDIC and NCUA insurance limits, you're likely to find that you're equally well-covered—as long as your chosen financial institution has either FDIC or NCUA insurance.

The best way to choose between banks and credit unions typically boils down to other factors a given bank or credit union can offer, including:

  • Do they offer the products/services/account types you wish to use?
  • Are their interest rates competitive with the other institutions you're considering?
  • Is their customer service easy to access and helpful?
  • Are their fees and pricing structures clear and competitive?

Clarifying your financial vision

You'll want to make sure your bank or credit union has either FDIC or NCUA insurance, because some banks and state-chartered credit unions don't carry these protections. However, if you are covered, know that FDIC and NCUA protections are so similar, you'll likely be able to protect your deposit accounts the same way no matter whether you opt for a bank or credit union.

If you're looking for a credit union with a variety of features and NCUA protection, explore the  Thrivent Credit Union and speak with a representative today.

Deposit and lending services are offered by Thrivent Credit Union, the marketing name for Thrivent Federal Credit Union, a member-owned not-for-profit financial cooperative that is federally insured by the National Credit Union Administration and doing business in accordance with the Federal Fair Lending Laws. Insurance, securities, investment advisory and trust and investment management accounts and services offered by Thrivent, the marketing name for Thrivent Financial for Lutherans, or its affiliates are not deposits or obligations of Thrivent Federal Credit Union, are not guaranteed by Thrivent Federal Credit Union or any bank, are not insured by the NCUA, FDIC or any other federal government agency, and involve investment risk, including possible loss of the principal amount invested. Must qualify for membership in TCU.