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Deposit Insurance Scenarios

How Adding Joints and Beneficiaries Increases Your Coverage

Let’s look at some scenarios and see what adding joint owners and beneficiaries will do for the combined NCUA and ESI coverage limits.

Scenario 1:

Tom is the sole owner on several deposit accounts with a total balance in excess of the combined NCUA and ESI coverage limit of $500,000.

Account Holder

Ownership Balance

Maximum NCUA+ESI Coverage

Amount Uninsured

Tom

$600,000

$500,000

$100,000

 

He adds his son Jack as a joint owner on all of his accounts, and now, because both owners are entitled to $250,000 each of insurance coverage from the NCUA and an additional $250,000 from ESI, the combined balance is insured for up to $1,000,000.

Account Holder

Ownership Balance

Maximum NCUA+ESI Coverage

Amount Uninsured

Tom

$300,000

$500,000

$0

Jack

$300,000

$500,000

$0

Total

$600,000

$1,000,000

$0

 

Scenario 2:

Buck and Sally are joint owners on multiple deposit accounts that total $300,000. Like Tom and Jack in Scenario 1, their accounts are insured for up to $500,000 by the NCUA and an additional $500,000 from ESI. 

Account Holder

Ownership Balance

Maximum NCUA+ESI Coverage

Amount Uninsured

Buck

$150,000

$500,000

$0

Sally

$150,000

$500,000

$0

Total

$300,000

$1,000,000

$0

 

However, Sally just learned that she has inherited $1.2 million, and she and Buck want to make sure their deposits will be fully insured.

If they put $1,200,000 into their jointly owned deposit accounts, bringing their total to $1,500,000, they will have maxed out the NCUA and ESI coverage on those accounts at $1,000,000, leaving $500,000 uninsured.

Account Holder

Ownership Balance

Maximum NCUA+ESI Coverage

Amount Uninsured

Buck

$750,000

$500,000

$250,000

Sally

$750,000

$500,000

$250,000

Total

$1,500,000

$1,000,000

$500,000

 

They have four kids, so they open an additional joint account with the $500,000 that is uninsured and name their children as beneficiaries, meaning the new account is covered for up to $2,000,000 ($250,000 for each of the four beneficiaries per joint owner) through the NCUA and an additional $2,000,000 from ESI.

Account Holder

Beneficiaries

Account Balance

Maximum NCUA+ESI Coverage

Amount Uninsured

Buck

Ava, Jane, Joey, Bobby

$250,000

$2,000,000

$0

Sally

Ava, Jane, Joey, Bobby

$250,000

$2,000,000

$0

Total

 

$500,000

$4,000,000

$0



The credit union is federally insured by the National Credit Union Administration.
Additional insurance of up to $250,000 on your savings accounts is provided by Excess Share Insurance Corporation, a licensed insurance company.

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