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Insurance Coverage In Credit Unions.

Ally6770
  |     |   4,310 posts since 2010

I wrote NCUA Saturday and received my reply today.

The account where you are the owner with two beneficiaries is covered up to $500,000. It is considered an informal revocable trust for NCUA insurance purposes. I have attached the booklet Your Insured Funds, so you can read the difference between informal and formal revocable trust accounts.

Office of Credit Union Resources and Expansion (CURE)

1775 Duke Street, Alexandria, VA 22314

Phone: (703) 664-3280, Cell: (703) 283-9144

As I have CD's over the insurance limit and all we hear now

is stay below $250,000. Now I am OK. I just had to be sure and verify that my beneficiaries do not have funds in the credit unions I have the CD's in. 

I wrote I did not have POD, ITF  etc in the title of any of my credit union accounts. This is for credit unions only and the banks FDIC page say it must have ITF, POD etc. in the title.  I will print this and put it in my notebooks I have for the children with their copy of my CD's and copies on the credit unions letterhead that they are the beneficiaries, or the copy of the signature card stating that they are beneficiaries.

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JeffinEasternFL
  |     |   744 posts since 2020
FWIW and TY! Diddo for me: no PoDs allowed in titles of various CDs (though I asked..), Mine are also one owner CDs that with interest and three will be over $250K balance for duration. I simply (from reading here and using the FDIC/NCUA website) added 2 beneficiaries; one is 99% other 1%, the next CU allowed me to make 99.9% and .1%. The other 2 jumbo CDs will not pass $250K so no secondary beneficiary needed for coverage. My one mistake was Savebetter: they will not allow more than one beneficiary thus thru Sallie Mae Bank and Savebetter, my coverage stops at $250K. I've asked 2x. It's only 24~ months to maturity so next time, any CD thru Savebetter I will limit to $200K.

The media, writers, bankers, tellers all get it wrong regarding this issue and Congress should have some changes made for simplicity. Perhaps all accounts of any one owner at any FI by SSN/TIN get $1M total coverage. KISS! Period!. Banks can offer business or consumers more coverage by an added fee or offer an incentive "sweep program" much like MBoI has (no extra cost).
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Ally6770
  |     |   4,310 posts since 2010
Businesses used sweep accounts even years before I retired from banking in 2008.
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txFish1
  |     |   479 posts since 2023
Not related to Trust/POD accounts but I thought I would say how impressed I was with NCUA not long ago as my wife had a single account at a really well run local CU that always has well above average CD rates and we wanted to max out some coverages at this CU. Whhn I called them they said someone from the Insurance/Legal Dept would call me back and the next morning NCUA called me back and actually went over with me to make sure you have single acct with no beneficaries, joint acct with no beneficaries and even IRA accounts with no beneficiaries to expand the coverages. I knew this already as I had gone to the NCUA insuarnce coverage estimator but in these times I felt relieved after talking to her.
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Ally6770
  |     |   4,310 posts since 2010
NCUA people are great. I had a NCUA tax lawyer call me at 10:30 on a Friday night when Labor Day was on Monday in I think 2011, and said she could not sleep and got our her laptop and saw my email. She asked if it was too late and I said we had just moved that day and was waiting for my son to come, driving 8 hours to spend a few days with us to make sure I did not need any help with my sick husband.

She said she couldn't believe what I wrote and wanted to talk on the phone rather that back and forth in emails and make sure she got the story right. We were on the phone for quite a while and at at the end she said you go into that credit union next week when you have time and that credit union will have that CD all ready for you except for the amount and your signature. We did and they did and even met us at the back door with coffee and with a chair with wheels for my husband. NCUA people are extremely helpful, polite, efficient and get the job done. And no question is too small for them and they make sure you understand it also. I wanted this in writing to put in my notebooks so I emailed this one also but have called when people in the credit union gave me information I was sure was incorrect. One didn't even have a policy and procedure book. One didn't even know that accounts were insured to $250,000 and said "his bank" was insured to 100,000 3 years after they were insured to $250,000 and he was counting IRA's for both my husband and I which are insured separately and refused to sell me a CD on special for the holiday weekend.
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txFish1
  |     |   479 posts since 2023
NCUA above and beyond the call of duty! That is great
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chill08
  |     |   96 posts since 2022
That is what I was told when I called NCUA months ago, still it’s good to hear it reaffirmed, especially the no POD designation in the account title. Thanks for sharing.
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lou
  |     |   1,004 posts since 2010
Why do you need to verify that your beneficiaries do not have funds in the credit unions you have CDs in?
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Ally6770
  |     |   4,310 posts since 2010
The way I understood an article of chronically during the 2008 bank closings when the banks were usually closed on a Friday night and opened on Monday, a single owner account with no beneficiaries and under the insurance limit their accounts were cleared first. Those with beneficiaries they had to get the SS numbers of the beneficiaries if the institution did not have them to make sure they didn't have other accounts in that institution and would be over the insurance limit. If it was not over the insurance limit those accounts were OK. I don't remember what would happen or if I even read what would happen if the beneficiaries had accounts along with your money and it was over the insurance limit what would happen. Maybe you can call and ask if it would affect the owner or the beneficiaries. These were rules with banks. I no longer have any money in any bank, unless you call my stock that I was given throughout the years and the tax free stock options that I have cashed before the 10 years were up. I am so risk adverse I am not taking any chances on any delays of getting my money if one closes. I want to be there Monday morning and get my money if I want it. I ask my kids now if they have any money in the places I do before I get a large CD as I am combining CD so they will near or just over the limit when the last interest is added at maturity.
In earlier days when the kids were younger and not near retirement and my husband was alive we would have joint accounts with 2 beneficiaries and have no worries. Now my insurance limits are down to half of what it was when he was alive and my children are near retirement in one is in his 60's and a doctor. So I ask. The other one is a professional and has had 8 promotions in 8 years and 3 raises last year so I ask him also. He was a traveler around the world so I just assumed he was cash poor playing guitar and having a small recording company writing music for singers, song writers, movies and ads on TV and showcasing some of the better clients.
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lou
  |     |   1,004 posts since 2010
A beneficiary of an account would not add to the insurance limit if they were owners of other accounts at the same bank or credit union. Your comparing apples to oranges.
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55Chevy
  |     |   13 posts since 2020
Very beneficial post as it confirms what we already know. Thank you additionally Lou for posting the NCUA office title, address, and contact numbers. We are now aware that this posted contact info. is one we will most likely get a response from NCUA if ever needed!
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