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If an informal revocable trust designates the account owner's formal trust as its beneficiary, the informal trust account will be treated as if titled in the name of the formal trust.

The Share Insurance Fund administered by the NCUA does not insure digital assets or cryptocurrencies. Credit unions use third-party service providers to provide their members with digital asset and cryptocurrency services. The services offered by these third-party providers can include exchange activities involving buying and selling digital assets or cryptocurrencies or digital asset storage services that hold these assets for credit union members.

As a courtesy and for informational purposes only, some credit unions include the value of their members’ digital assets and cryptocurrency holdings that are acquired through these third-party providers on the credit union’s mobile application. However, digital assets and cryptocurrencies do not represent shares at the credit union and are not covered by the Share Insurance Fund.

NCUA share insurance does not cover digital assets or accounts maintained at other entities that hold digital assets or cryptocurrencies for credit union members. The following are not covered by share insurance.

• The NCUA’s share insurance does not cover digital assets or cryptocurrencies offered through third-party vendors to credit union members, nor does share insurance extend to digital assets or cryptocurrency stored or held in custody by a credit union. Federal credit unions are not authorized to serve as a custodian for cryptocurrencies and other digital assets. Whether federally insured, state-chartered credit unions chartered in a particular state have the authority to serve as a custodian for cryptocurrencies and other digital assets depends on state law and regulation. There is no prohibition in the Federal Credit Union Act or the NCUA’s regulations preventing federally insured, state-chartered credit unions from conducting this activity, provided the credit union can do so safely and soundly and in compliance with all applicable laws and regulations.
• The NCUA does not insure assets or accounts issued by any entities other than a federally insured credit union, such as cryptocurrency companies. The NCUA’s share insurance does not protect against any such entity's default, insolvency, or bankruptcy, including cryptocurrency custodians, exchanges, brokers, and wallet providers.
• The NCUA’s share insurance does not apply to financial products held at investment companies or investment brokers, such as stocks, bonds, money market mutual funds, other types of securities, commodities, or cryptocurrencies.
   

By federal law, the NCUA only insures shares and deposits held in federally insured credit unions, which includes both federal credit unions and the majority of state-chartered credit unions. The NCUA’s share insurance coverage applies to accounts such as share drafts, regular shares share certificates, and certain other accounts offered by a federally insured credit union.

The Share Insurance Fund administered by the NCUA does not insure digital assets or cryptocurrencies. The NCUA insurance only covers insured shares and deposits in the unlikely event of a credit union’s failure.

Digital assets are broadly defined as any digital representation of value that is recorded on a cryptographically secured distributed ledger or any similar technology. Digital assets are not fiat currency, as they are not issued by a government entity. Digital assets include, but are not limited to:

• Convertible virtual currency and cryptocurrency;
• Stablecoins; and
• Non-fungible tokens (NFTs).

Cryptocurrencies are digital assets that can be used as a medium of exchange. Cryptocurrencies are not issued by a central bank, so no central authority (like the U.S. Federal Reserve) manages or upholds their value.

The member remains liable for any payments due on a loan or credit card. The member would continue making payments as they did before the credit union failed until they are instructed to do otherwise in writing by the acquiring credit union or the NCUA. If a member's credit union is liquidated and the member has both a loan and shares at the credit union, the NCUA may deduct the loan balance from the share balance.

If a liquidated credit union is acquired by another federally insured credit union, all direct deposits, including Social Security checks or paychecks delivered electronically, will be automatically deposited into your account at the assuming credit union. If the NCUA cannot find an acquirer for the liquidated credit union, the NCUA will advise members to make new arrangements.

Members who have uninsured shares may recover a portion of their uninsured shares, but there is no guarantee that they will recover any more than the insured amount. The amount of uninsured shares they may receive, if any, is based on the recovery of the failed credit union’s assets. Depending on the quality and value of these assets, it may take several years to conclude recovery on all the assets. As recoveries are made, uninsured account holders may receive periodic payments on their uninsured shares claim.

Federal law requires the NCUA to make payments of insured accounts "as soon as possible" upon the failure of a federally insured credit union. While every credit union failure is unique, there are standard policies and procedures that the NCUA follows in making share insurance payments. Historically, insured funds are available to members within just a few days after the closure of an insured credit union.

The NCUA would either transfer the insured member's account to another federally insured credit union or give the federally insured member a check equal to their insured account balance. This includes the principal and posted dividends through the date of the credit union’s liquidation, up to the insurance limit.

If a member has accounts in credit union A and credit union B, and credit union A merges into credit union B, accounts of credit union A continue to be insured separately from the share deposits of credit union B for six months after the date of the merger or, in the case of a share certificate, the earliest maturity date after the six-month period. In the case of a share certificate that matures within the six-month grace period that is renewed at the same dollar amount, either with or without accrued dividends having been added to the principal amount, and for the same term as the original share certificate, the separate insurance applies to the renewed share certificate until the first maturity date after the six-month period. A share certificate that matures within the six-month grace period that is renewed on any other basis, or that is not renewed, is separately insured only until the end of the six-month grace period.

The NCUA will insure a deceased member's accounts as if he or she were still alive for six months after his or her death. During this "grace period," the insurance coverage of the member's accounts will not change unless the accounts are restructured by those authorized to do so. The NCUA applies the grace period only if its application would increase, rather than decrease, share insurance coverage.

For example: A and B own a qualifying joint account of $500,000 for which they each have a right of survivorship. B also has a single (or individual) account of $250,000 at the same federally insured credit union. If A dies, for six months after A's death the NCUA will still insure the A and B account as a joint account, even though B, as A's survivor, has inherited A's ownership interest in the account. After the grace period, B's increased ownership interest in the joint account would be added to his or her single account and insured to a limit of $250,000.

Please note this grace period does not extend to deceased beneficiaries listed on revocable trust accounts (also known as "payable on death" or "in trust for" accounts) or irrevocable trust accounts.

A revocable trust account is a share account owned by one or more people that identifies one or more beneficiaries who will receive the deposits upon the death of the owner(s). A revocable trust can be revoked, terminated, or changed at any time, at the discretion of the owner(s). The term "owner" means the grantor, settlor, or trustor of the revocable trust.

This ownership category includes both informal and formal revocable trusts.

• Informal revocable trusts — also known as payable on death (POD), in trust for (ITF), testamentary, or Totten Trust accounts — are the most common form of revocable trusts. These informal revocable trusts are created when the account owner signs an agreement — usually part of the credit union's signature card — stating that the deposits will be payable to one or more beneficiaries upon the owner's death.
• Formal revocable trust — also known as Living trusts or family trusts — are formal revocable trusts created for estate planning purposes. The owner of a living trust controls the share deposits in the trust during his or her lifetime. The trust document sets forth who shall receive trust assets after the death of the owner.

Share insurance coverage for revocable trust accounts is provided to the owner of the trust. However, the amount of coverage is based on the number of beneficiaries named in the trust and, in some cases, the interests allocated to those beneficiaries, up to the insurance limit. A trust beneficiary can be an individual (regardless of the relationship to the owner) or, a charity, or a non-profit organization (as recognized by the IRS).

Revocable trust coverage is based on all revocable trust deposits held by the same owner at the same credit union, whether formal or informal. If a revocable trust (formal or informal) has more than one owner, in order for each owner to receive NCUSIF coverage, each owner must be a member of the credit union in their own right. If a revocable trust account has more than one member-owner, each member-owner’s coverage is calculated separately, using the following rules.

• Revocable Trust Share Deposits with Five or Fewer Beneficiaries – Each member-owner's share of revocable trust deposits is insured up to $250,000 for each eligible beneficiary named or identified in the revocable trust (i.e., $250,000 times the number of different beneficiaries), regardless of actual interest provided to beneficiaries.
• Revocable Trust Share Deposits with Six or More – Each member-owner's share of revocable trust deposits is insured for the greater of either (1) coverage based on each eligible beneficiary's actual interest in the revocable trust deposits, with no beneficiary's interest to be insured for more than $250,000, or (2) $1,250,000.

Note: Determining coverage for revocable trust accounts that have six or more beneficiaries and provide different interests for the trust beneficiaries can be complicated. Contact the NCUA at 800-755-1030 if you need assistance in determining the insurance coverage of your revocable trust.
 

These are share accounts owned by one person and titled in the name of that person's retirement plan. The following types of retirement plans are insured in this ownership category:

• Any individual retirement account described in section 408(a) (IRA) of the Internal Revenue Code (26 U.S.C. 408(a)) or similar provisions of law applicable to a U.S. territory or possession;
• Any individual retirement account described in section 408A (Roth IRA) of the Internal Revenue Code (26 U.S.C. 408A) or similar provisions of law applicable to a U.S. territory or possession; and
• Any plan described in section 401(d) (Keogh account) of the Internal Revenue Code (26 U.S.C. 401(d)) or similar provisions of law applicable to a U.S. territory or possession.

All IRA and Roth IRA shares that an individual has in the same insured credit union are added together and the total is insured up to $250,000. Keogh accounts are insured separately up to $250,000.

Note: Naming beneficiaries on a retirement account does not increase share insurance coverage.
 

This is a share account owned by two or more people and titled jointly in the co-owners' names only, with no beneficiaries. If all co-owners have equal rights to withdraw money from a joint account, a co-owner's share of all joint accounts at the same insured credit union are added together and the total is insured up to $250,000. The primary owner of the joint account must be a member of the credit union, but co-owners are not required to also be members if the account is jointly owned with a right of survivorship. Note that co-owned revocable trust accounts are not included in this ownership category.

If a couple has a joint money market account, a joint savings account, and a joint share certificate at the same insured credit union, each joint owner's share of the three accounts are added together and insured up to $250,000 per owner, providing up to $500,000 in coverage for the couple's joint accounts.

This is a share account owned by one person and titled in that person's name only, with no beneficiaries. All of your single ownership accounts at the same insured credit union are added together and the total is insured up to $250,000. For example, if you have a share draft/checking account and a share certificate at the same insured credit union, and both accounts are in your name only with no beneficiaries named, the two accounts are added together and the total is insured up to $250,000. Note that retirement accounts and trust accounts are not included in this ownership category.

The "account records" of a federally insured credit union could include, for example, account ledgers, signature cards, share certificates, passbooks, and certain computer records.

The NCUA relies on "account records" of the federally insured credit union to determine how funds are insured. The NCUA may request supplemental documentation to identify the owners and beneficiaries. These documents may be used by the NCUA to confirm that the funds are actually owned in the manner indicated in the credit union’s account records and to determine the amount of insurance coverage.

Using different Social Security numbers, rearranging the order of names listed on accounts or substituting "and" for "or" in joint account titles does not affect the amount of insurance coverage available to account owners.