ATLANTA — The collapse of two major traditional banks has some people wondering about the safety of money placed in credit unions.
Several 11Alive viewers asked if credit unions insure deposits the same way as traditional banks.
Question
Are deposits in credit unions insured like traditional banks?
Sources
Answer
Yes, the vast majority of deposits in credit unions are insured through organizations that are backed by the federal government.
What we found
Ganduri explains that unlike traditional banks, credit unions are not-for-profit financial institutions.
“So any profits that the credit union makes will eventually trickle down to the members in terms of lower interest rates, lower fees and those kinds of things,” said Ganduri.
Your money in traditional banks is insured by the Federal Deposit Insurance Corp or the FDIC.
In a credit union, it’s insured by the National Credit Union Administration.
Both organizations are backed by the federal government to cover up any amount up to $250,000.
Amounts above $250,000 in a single account are not insured.
“Those are usually business accounts,” said Berger. “Typically, that doesn’t occur very often at credit unions. 91% of the entire industry is insured.”
While there are a few traditional banks the FDIC doesn’t insure, all federally chartered credit unions and the overwhelming majority of state chartered credit unions are insured.
The Georgia Department of Banking and Finance tells us that some states allow credit unions to offer private insurance but not here in Georgia.
So, we can verify that like traditional banks, the vast majority of deposits in credit unions are insured through organizations that are backed by the federal government.