Are members of Finger Lakes Credit Union insured by law? Discover how NCUA insurance insures deposits up to $250,000 for every member.
Picture this scenario: you have carefully saved money for the future. Perhaps it is a dream home, a child’s education, or a well-deserved vacation. Whatever you have saved for is important to you. But what if something goes wrong with a bank that holds custody of your money?
When I joined Finger Lakes Credit Union as a new member, I had those very questions. I wanted to make sure that my money would be protected. We’ve heard about bank failures, economic downturns and crises. But credit unions are not like other banks, and what you learn about how they are governed can be very reassuring.
Are members of Finger Lakes Credit Union protected by law? Yes, and in this article we’ll explain exactly how.
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Understanding Credit Union Security: The Role of NCUA Insurance
Before discussing in detail Finger Lakes Credit Union, let us first learn about how credit unions keep their members’ money safe.
What is the NCUA and How Does it Protect Me?
The National Credit Union Administration is a federal agency that regulates and oversees credit unions in the United States. Think of it as being comparable to the FDIC for banks.
The NCUA operates the National Credit Union Share Insurance Fund (NCUSIF), which insures deposits held at federally insured credit unions. What that means is that in the event a credit union fails, depositors would not lose their money—up to a certain point.
How much is insured?
Your deposits at Finger Lakes Credit Union are insured up to $250,000 for every individual depositor. They include checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs).
Let us analyze this.
Has Anyone Ever Lost Money in a Federally Insured Credit Union?
No one has ever lost a cent of insured savings in a federally insured credit union. That is a good record of financial security.
Finger Lakes Credit Union vs. Banks: What’s the Difference?
Most people consider credit unions and banks as interchangeable terms, yet both are based on a different model.
1. Member-Owned vs. Profit-Driven
Unlike shareholder-owned commercial banks, credit unions like Finger Lakes Credit Union are owned by members. This means that profits are redistributed to members in the form of lower fees, better rates of interest, and services that are community-based.
For instance, when I compared Finger Lakes Federal Credit Union to my old bank, Bank of the Finger Lakes, I noticed a significant difference in service. The credit union had more competitive loan rates, fewer unexpected fees, and a more personalized service.
2. People-Centric Approach
Credit unions prioritize members over profits and as a result often offer:
For example, when I needed to borrow money for a car, Finger Lakes Credit Union gave me a rate that was 1.5% lower than what I had been quoted at a bank. Over the life of the loan, that translated into saving me hundreds of dollars.
What Happens If a Credit Union Fails?
Let’s tackle a fear that many have: What happens if Finger Lakes Credit Union collapses?
Though credit union failures are not frequent, they do happen. Thankfully, members’ deposits are insured by NCUA.
Step-by-Step Procedure in Case If a Credit Union Collapses
Effectively, you will never lose insured money.
Maximizing Your Deposit Insurance Coverage
If you have more than $250,000 in savings, there are smart ways to ensure that you are fully protected:
Are Credit Unions Safer Than Banks?
You might ask yourself, “Should I use a credit union over a bank more often?”
Although both are safe, credit unions are more conservative in their loan making. They do not make speculative investments like some commercial banks.
Moreover, credit unions are more concerned with assisting members than with making profits. They therefore frequently offer:
If you are struggling with debt, many credit unions like Finger Lakes Federal Credit Union offer free counseling services to guide you in gaining control over your finances.
FAQs
1. Is my money safe at Finger Lakes Credit Union?
Yes, deposits held at Finger Lakes Credit Union are insured by the NCUA (National Credit Union Administration) up to $250,000 for each depositor. This safeguards your insured money in case of a failure of the credit union.
2. In what ways is NCUA insurance comparable to FDIC insurance for banks?
Both FDIC for banks and NCUA for credit unions insure deposits up to $250,000 for every individual depositor. The only difference is that NCUA insures credit union members and FDIC insures bank customers. Both are backed by the U.S. government and provide sound financial protection.
3. Can I insure more than $250,000 at Finger Lakes Credit Union?
Yes! You can extend your coverage by:
4. What happens if Finger Lakes Credit Union fails?
If it were to fail, the NCUA would step in by merging it with another credit union or by closing it. In a closing scenario, insured deposits would be reimbursed to members up to the insured level. No protected funds would be at risk.
Final Thoughts: Should You Bank with Finger Lakes Credit Union?
If you need personalized service, lower fees and charges, and sound financial stability, Finger Lakes Credit Union is a good choice.
Your deposits are federally insured up to $250,000 so you don’t lose your money in case the credit union fails. Compared to large banks such as Bank of the Finger Lakes, credit unions typically have better rates and member benefits.
Personally, switching over to Finger Lakes Credit Union was one of the most intelligent money choices I ever made. In addition to the cost savings, I value the community-based philosophy, low loan rates, and one-on-one service I receive every time I visit a branch.
If you are considering membership, I would certainly advise you to do so. Not only is your money safer, but you are a member of a bank that is concerned with its members.
Additional Resources
To learn more about credit union safety and deposit insurance, check out these helpful resources:
