Are my account balances insured, and if so, for how much?
Redwood Credit Union's deposit accounts are federally insured by the NCUA for a minimum of $250,000. However, insurance can often be increased depending on the way an account is structured. Watch this video for an overview of how to maximize your coverage.
Below are examples of the insurance provided for various types of accounts:
Individual accounts without a pay on death beneficiary: $250,000
Joint or Multi-owner accounts without a pay on death beneficiary: $250,000 per owner
Trust account or accounts with pay on death beneficiaries: $250,000 per beneficiary for each account owner.
Business accounts: $250,000
IRA accounts: $250,000
Basics of Structuring Accounts to Maximize Insurance
Different account numbers or different shares with the same ownership at the same institution is not enough to expand NCUA insurance beyond the standard $250K. As long the ownership of accounts are the same, they all are combined together for insurance purposes. The key is to change ownership structures.
Some easy ways to maximize coverage through different ownership are:
First and foremost: having beneficiaries (which we offer on all standard Membership and trust accounts). Pay on death beneficiary accounts are insured for $250K per beneficiary, per Account owner. For example, if the Member and her husband opened an account listing their 3 kids as beneficiaries, the account would be insured for $1.5 M ($250K X 6).
Next, each of the following types of accounts are insured entirely separately:
Trust/Pay on Death Beneficiary
For Example: If the Member has an individual account with no beneficiary, and a joint account with his wife with no beneficiaries, that’s 2 different ownership types and would total $750K in insurance ($250K for the individual, $250K per owner on the joint).
These are just some very common examples, but there are many others. The key takeaway is that we can almost always find a way to ensure Members are fully covered. While it can sometimes be a bit confusing, using the Share Insurance Estimator tool is a great option as it customizes the coverage for the Member(s) for their situation.