Is your money safe in a credit union?
In most cases, yes. Credit unions that offer NCUSIF insurance are as secure as FDIC insured banks. Both forms are as strong as the entity standing behind them - the US government.
Some credit unions use alternative insurance programs, and those programs are getting more attention. Bankdeals reports on a credit union making the switch from NCUSIF coverage to a private insurer: American Share Insurance (ASI).
Why give up government backing? Those who switch would argue that NCUSIF insurance has become too expensive. Credit unions, like banks, have paid special assessments to bolster insurance funds as a result of the financial crisis. Some of the stronger institutions think it's unfair to pay so much for others who have failed, and some credit unions barely have the funds to pay these assessments.
What should you do if your credit union drops NCUSIF insurance? Take a look at the tradeoffs. Can they offer rates, products, services, and relationships that are worth the risk?
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