What’s your first thought when you consider the safety of your investments?
You might think about federally insured deposit accounts through National Credit Union Share Insurance Fund (NCUSIF). That’s a logical and comforting first thought for most credit union members, because your deposit accounts are covered up to a total of $250,000, and not one depositor has ever lost money in a deposit account that is covered by NCUSIF.
But deposit accounts are not usually considered investments. Investments generally involve market risk, such as money invested in the stock market or mutual funds.
So, your first thought might be about your investments that are at risk in the stock market. It’s well established that there’s an element of risk in all financial investments, and none are 100% safe from loss.
However, it’s also important to understand whether or not your credit union investments are insured. Investment adviser Linda Goin gives a clear explanation: “The NCUSIF does not insure the money individuals invest in stocks, bonds, municipal bonds, or other securities such as mutual funds (including money market mutual funds, and mutual funds that invest in stocks, bonds and other securities); annuities or insurance products such as automobile and life insurance, even if these products were purchased at a federally insured credit union or through an affiliated broker/dealer/insurance agent that is offering these products on behalf of a federally insured credit union.”
So, to review, these are the types of member share accounts and deposits a credit union handles in its usual course of business, and the ones covered by NCUSIF:
1.) Regular shares (savings accounts).
2.) Share certificates.
3.) Share draft accounts (checking accounts).
But any investment products a credit union offers, such as mutual funds, annuities, and other non-deposit investments are not insured by the NCUSIF.
As a member of Wasatch Peaks Credit Union, your checking and savings accounts are insured by NCUSIF. This insurance also covers your retirement savings in Traditional IRAs, Roth IRAs and Keogh accounts, which are insured separately from your regular (non-retirement) accounts in the same credit union.
The good news
Experts predict a great year for returns on savings, especially CDs. As interest rates continue to rise, it’ll be increasingly more profitable to sock your money away in an interest-bearing account. If you’ve been putting off opening a certificate or increasing the deposits in your share account, now is an excellent time to consider it. With a 12- or 24-month certificate, you can take advantage of rising interest rates while still leaving yourself the flexibility to re-invest once interest rates rise again.
So, if you’ve been thinking about opening a share certificate or other savings options, talk with Wasatch Peaks Credit Union to get started.