Individual Account Share Insurance Rules
- The accounts must be established by or for the same person.
- If more than one account is held by the same single person, the accounts must be added together and will be insured up to $250,000.
- Accounts owned by the same person include:
- Individual accounts (share, share draft, share certificates)
- Sole proprietorship accounts (such as "doing business accounts" without indication of a legal partnership or corporation)
Joint Account Share Insurance Rules
- The ownership interests of each co-owner in all joint accounts he or she has in the credit union are added together and insured up to $250,000.
- Each person is insured up to $250,000
- Joint accounts with two individuals are insured up to $250,000
- Members with individual accounts that are joint on another account are considered separate;
- The individual account has its own $250,000 coverage
- The joint account has its own coverage of $250,000 per owner, in the case of two owners $500,000.
- Changing the order of the names on various joint accounts does not increase the $250,000 maximum insurance supplied.
- A joint owner does not have to be a member of the credit union to receive insurance coverage.
Revocable Trust Account Share Insurance Rules
- These can be testamentary, "Totten," "payable on death" (POD), living trusts, and other similar accounts.
- There is a maximum of $250,000 share insurance for each qualifying beneficiary, only if the qualifying beneficiary would be entitled to his or her interest in the trust assets upon the grantor's death.
- In order to qualify for an additional $250K of separate share insurance coverage (per beneficiary), beneficiaries must be "qualifying beneficiaries", which means they must be related to the account owner in the following manner: spouse, child, grandchild, parent or sibling (including biological, adoptive and step relationships).
Living Trusts
- A living trust is a type of revocable trust (see Revocable Trust rules above) that and owner creates and retains control over during his or her lifetime.
- Coverage applies to qualified beneficiaries only if a qualifying beneficiary would be entitled to his or her interest in the trust assets upon the grantor's death and that ownership interest would not depend upon the death of another beneficiary.
- If there is more than one grantor, the beneficiary's entitlement to the trust assets must be upon the death of the last grantor.
Irrevocable Trust Account Share Insurance Rules
- An irrevocable trust account is one in which the grantor, who contributes funds, relinquishes all powers to revoke the trust.
- The trust agreement must be valid under state law.
- Either the grantor (the creator of the trust who may also be called the settlor) or the beneficiary of the trust must be a member of the credit union. IF there is a separate trustee, that trustee cannot be the only person who is a member. If a trust account is opened with more than one grantor or more than one beneficiary, then all the grantors or all the beneficiaries must be members of the credit union.
- The credit union's records must list the names of both the grantor and the trustee, and the trustee must complete an account signature card.
- The beneficiary's interest must be ascertainable either from the records of the credit union or the trustee, and be contingent only on the death of the grantor(s).
- All irrevocable trust accounts established for the same beneficiary by the same grantor are added together and insured up to $250,000 in the aggregate, separately from other accounts of the grantor, beneficiary, or trustee.
Retirement Account Share Insurance Rules
- All individual retirement accounts (IRAs), including Roth IRAs, and all Simplified Employee Plans (SEPs) owned by the same individual at the credit union are added together and insured up to $250,000.
For a general overview of how your accounts are covered please review this link from NCUA's website
http://www.ncua.gov/ShareInsurance/HOW_YOUR_ACCT_ARE_INSDindd.pdf
For more detailed information regarding how your accounts are insured please review this link from NCUA's website http://www.ncua.gov/Publications/brochures/insured_funds/funds.pdf.
You can gather additional information about credit unions through NCUA, the Credit Union National Association (CUNA) and the Credit Union Association of New York. Their websites are as follows:
National Credit Union Administration
http://www.ncua.gov
Credit Union National Association
http://www.cuna.org
Credit Union Association of New York
http://www.cuany.org
(The above links are external websites, you will be leaving TCT's website)
Examples from Your Insured Funds Booklet by NCUA
Family of Two
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Individual Accounts
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Husband Individual
|
$250,000
|
|
Wife Individual
|
$250,000
|
Joint Tenancy Accounts
|
Husband & Wife (Joint)
|
$500,000
|
Testamentary Revocable Trust Accounts
|
Husband as Trustee for Wife
|
$250,000
|
 |
Wife as Trustee for Husband
|
$250,000
|
TOTAL 1,500,000
|
Family of Three
|
Individual Accounts
|
Husband Individual
|
$250,000
|
|
Wife Individual
|
$250,000
|
|
Child Individual
|
$250,000
|
Joint Tenancy Accounts
|
Husband & Wife (Joint)
|
$250,000
|
|
Husband & Child (Joint)
|
$250,000
|
|
Wife & Child (Joint)
|
$250,000
|
The Husband is insured to $250,000 on his two accounts with Wife and Child. The Wife is insured to $250,000 on her two accounts with Husband and Child. The Child is insured to $250,000 on his/her accounts with father and mother.
|
Testamentary Revocable Trust Accounts
|
Husband as Trustee for Wife
|
$250,000
|
|
Husband as Trustee for Child
|
$250,000
|
|
Wife as Trustee for Husband
|
$250,000
|
|
Wife as Trustee for Child
|
$250,000
|
(Eligibility for Trusts - Spouse, Child, Grandchild, Parent, Sibling)
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Total $2,500,000
|
|
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