Glossary(I)

I

Inactive Account

An account that has no activity; neither deposits nor withdrawals posted to the account, for a significant period of time.

Independent Activity

A corporation, partnership, or unincorporated association shall be deemed to be engaged in an independent activity if the entity is operated primarily for some purpose other than to increase share insurance coverage.

Index-linked Share Certificate (SC)

An index-linked SC is a deposit obligation of the issuing credit union. Index-linked SCs provide the member the ability to participate in the appreciation, if any, of a particular index (stock), during the term of the SC. Index-linked SCs may have complicated payout structures and may not be suitable or appropriate for all members.

Individual Account

An account in the name of one individual.

Individual Retirement Account (IRA)

A retirement savings program for individuals to which yearly tax-deductible contributions, up to a specified limit, can be made. The amount contributed is not taxed until withdrawn. Withdrawal is not permitted without penalty until the individual reaches age 59 1/2.

Informal Revocable Trust

Informal revocable trusts are created when the account owner signs an agreement, usually part of the credit union’s signature card, stating that the funds are payable to one or more beneficiaries upon the owner’s death. Informal revocable trust accounts are also called payable on death (POD) accounts, in trust for (ITF) accounts, testamentary or Totten trust accounts.

Insolvency

Insolvency is when your total debts are more than the fair market value of your total assets.

Insufficient Funds

When a member's checking or share draft account balance is inadequate to pay a check or ACH presented for payment.

Insurance (Hazard)

Insurance to protect the homeowner and the lender against physical damage to a property from sources such as but not limited to fire, wind, or vandalism.

Insurance Regulations

The regulations governing the amount of insurance coverage provided by the NCUA at an insured credit union.

Insured Shares

Deposits held in federal and most state chartered credit unions that are guaranteed by the National Credit Union Share Insurance Fund (NCUSIF) against loss due to credit union failure.

Interest

The term interest is used to describe the cost of using money, a right, share, or title in property.

Interest Rate

The rate paid by a borrower to a financial institution in exchange for the use of the financial institution's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures.

Irrevocable Trust Account

A share account held in the name of a written trust in which the owner (the person who created the trust) does not possess power to terminate or revoke the trust agreement although the owner may have a retained interest in the assets of the trust. An irrevocable trust may be created upon the death of the settlor of a revocable living trust, the actual execution or creation of an irrevocable trust agreement, or by statute, or a court order. Irrevocable trust accounts are a separate account ownership type. Because most irrevocable trusts may not qualify for per-beneficiary coverage, the NCUA's Share Insurance Estimator does not ask for beneficiary information. Due to the complexity of irrevocable trusts, you, your attorney, or your financial advisor should consult with the NCUA regarding share insurance coverage.