Insured or Not Insured: Bank Products — August 2011, reviewed January 2013

When you see the FDIC sign on a banks door or the NCUA sign on a credit unions door, which means that the products they offer are insured, right?  The correct answer is that some may be insured and others may not be.  Banking institutions have evolved into financial supermarkets.

What is insured includes checking accounts, money market deposit accounts, NOW accounts, savings accounts, certificates of deposit and retirement accounts placed in deposits at insured institutions.  The insurance level is at least $250,000 per depositor per insured institution.

Products that are NOT FDIC or NCUA insured, even if purchased from a bank or credit union, are those that are investment risks which includes the potential loss of principal.  This includes mutual funds, annuities, stocks and municipal bonds.  Treasury securities and savings bonds are not insured by the FDIC or NCUA but are backed by the U.S. Government.  Contents of safe deposit boxes also are not protected by FDIC insurance.

While as consumers we can benefit from the convenience of going to one provider for many different services, we also need to be aware of the risk of loss.  Be a smart consumer by understanding the products that you purchase, regardless of where you purchase them.

More information: Federal Deposit Insurance Corporation http://www.fdic.gov/consumers/banking/confidence/symbol.html

National Credit Union Administration http://www.mycreditunion.gov/protect/Pages/SI.aspx