NCUA Insured Institution

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Definition: NCUA Insured Institution

Refers to a finance institution/credit union that participates in the National Credit Union Administration (NCUA) program of the Unites States of America. Commonly, most NCUA insured institutions are either federal or state chartered credit unions and savings banks. The NCUA is an independent federal government agency responsible for charter, supervision, and insurance of federal credit union.

The NCUA and the NCUSIF were established in 1970. The NCUA is equivalent to the Federal Deposit Insurance Corporation (FDIC), but the difference is that NCUA deals only with credit institutions and uses the National Credit Union Share Insurance Fund (NCUSIF). The NCUSIF insures accounts at NCUA insured institutions, which may comprise, savings, checking/draft accounts, money markets, commercial deposits(CDs), IRA, etc. Just like the FDIC, NCUA is completely backed by the government and ever since its inception, no affiliated member credit union has lost money. The maximum dollar amount insurable in a single NCUA institution is $250000, i.e the maximum insurance coverage. The NCUA is funded solely by the credit unions. Hence NCUA acts an independent regulator of credit unions.

All federal credit unions are automatically covered by the NCUA insurance, and are ‘NCUA INSURED INSTITUTIONS’. Others may choose to be covered by NCUA or might opt for private insurance. At present the there are over 5000 federal credit unions that are NCUA insured institutions and over 3000 state chartered credit unions that are NCUA insured institutions.

In the unlikely event of a credit union failure, the National Credit Union Share Insurance Fund (NCUSIF) covers the balance of each NCUA insured institution’s account, up to the insurance limit. Thus member accounts in NCUA federally insured credit unions are protected

The NCU does not insure any money of the credit union invested in instruments like insurance products, annuities, and securities as mutual funds, stocks, bonds, etc.


Hence, this concludes the definition of NCUA Insured Institution along with its overview.


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