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.
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.