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Mark Kolarik
Mark Kolarik is the President of the Kansas Teachers Community Credit Union, located in Pittsburg, KS, since 10-2002 and is a board member of the Kansas Corporate Credit Union located in Wichita, KS . He has been employed in the financial service industry for the last 31 years, having worked in several credit unions for 21years and 10 years in the banking industry. He holds a Bachelor of Business Administration degree from the University of Wisconsin-LaCrosse and is a Certificated Credit Union Executive.
Banking & Finance
2010-11-01 13:31:00
How are accounts insured...and for how much?
Answer: Sure! Thank you for asking. It is a common question, and one many people would like answered. First, let us address how credit unions and banks are insured. As you know, the Federal Deposit Insurance Corporation, or FDIC secures accounts with banks. The National Credit Union Administration or NCUA secures accounts with credit unions. Like the FDIC, NCUA is a federal government agency that charters and supervises credit unions. NCUA operates the National Credit Union Share Insurance Fund (NCUSIF). NCUSIF insures the accounts of millions of account holders in all federal credit unions and the majority of state-chartered credit unions. Only those credit unions with sound operational standards qualify to NCUSIF coverage, so it is important to choose a credit union that has this designation. The NCUSIF is fully backed by the U.S. government in the same way as the FDIC, and the coverage for each is the same $250,000. However, it is possible to obtain more than $250,000 in coverage. NCUSIF provides coverage up to $250,000 for individual accounts including regular shares, share drafts, money market accounts and share certificates. If a person has more than $250,000 in a credit union, there are several options to obtain more coverage through different types of accounts. Retirement Accounts: Members with IRAs and KEOGH retirement accounts have additional coverage available. NCUSIF insures traditional and Roth IRAs for $250,000 at each credit union. NCUA insures each KEOGH account separately for $250,000. This account insurance protection is separate from other credit union accounts, so if you have a regular share account, an IRA and a KEOGH at the same credit union, each account is covered for $250,000. Joint Accounts: NCUSIF provides joint account holders with $250,000 in coverage for each. Therefore, a two-person account would have $500,000 in coverage. This coverage is separate from and in addition to the coverage available for other accounts, such as individual accounts and retirement accounts. Trust Accounts: Trust accounts provide additional options. The NCUSIF provides separate coverage for both revocable and irrevocable trusts. Revocable trust accounts may qualify up to $250,000 per beneficiary named by the owner. Funds placed in an irrevocable trust have separate coverage based on the interest of the beneficiary. If the beneficiary has an interest in more than one account created by the same owner, interests in all accounts are added together and insured for a total of $250,000. All of this can be confusing at times and individual situations should be discussed in detail at the credit union or bank. To help get an idea the different account structure scenarios, an interactive insurance estimator is available on the NCUA website at http://webapps.ncua.gov/ins
 
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