How Much Money Is Insured By The Ncua?

Share Insurance FAQ

What is NCUA?

The National Credit Union Administration (NCUA) is the independent agency that administers the National Credit Union Share Insurance Fund (NCUSIF). Like the FDIC's Deposit Insurance Fund, the NCUSIF is a federal insurance fund backed by the full faith and credit of the United States government. The NCUSIF insures member savings in federally insured credit unions, which account for about 98 percent of all credit unions in the United States. Deposits at all federal credit unions and the vast majority of state-chartered credit unions are covered by NCUSIF protection.

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What is the purpose of NCUSIF?

The NCUSIF protects members' accounts in federally insured credit unions, in the unlikely event of a credit union failure. The NCUSIF covers the balance of each member's account, dollar-for-dollar up to the insurance limit, including principal and posted dividends through the date of the failure.

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How do I know if my credit union is federally insured?

All federally insured credit unions must prominently display the official NCUA insurance sign at each teller station, where insured account deposits are normally received in their principal place of business and in all branches. federally insured credit unions are also required to display the official sign on their Internet page, if any, where they accept share deposits or open accounts. No credit union may end its federal insurance without first notifying its members.

All federally insured credit unions can be located under the Credit Union Lookup Option under the Share Insurance page.

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Do I have to be a credit union member to be insured at that federally insured credit union?

All primary owners (natural person(s) and non-natural person(s)) on any share account at a federally insured credit union must fall within that credit union's field of membership and be on record as a member of that credit union. Co-owners on joint accounts with no beneficiaries are provided insurance coverage regardless of whether they are a member. However, co-owners on revocable trust accounts must be members of the credit union for their portion of the funds to be federally insured. Also, all owners on an irrevocable trust account must be members of the credit union OR all the beneficiaries must be members of the credit union for the account to be federally insured. If membership status of a co-owner is unknown, one should inquire with their credit union.

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What types of accounts are eligible for NCUA insurance?*

NCUA share insurance covers many types of share deposits received at a federally insured credit union, including deposits in a share draft account, share savings account, or time deposit such as a share certificate. NCUA insurance covers members' accounts at each federally insured credit union, dollar-for-dollar, including principal and any accrued dividend through the date of the insured credit union's closing, up to the insurance limit. This coverage also applies to nonmember deposits when permitted by law.

NCUA does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities or municipal securities, even if these investment or insurance products are sold at a federally insured credit union. Credit unions often provide these services to their members through third-parties, and the investment and insurance products are not insured by the NCUSIF. In locations where these investment and insurance products are offered or sold to members, credit unions are required to disclose that the products:

-- are not insured by NCUA;

-- are not deposits or other obligations of the credit union and are not guaranteed by the credit union; and

-- are subject to investment risks, including possible loss of the principal invested.

In addition, NCUA does not insure safe deposit boxes or their contents.

*These share insurance coverage limits refer to the total of all shares that account owners have at each federally-insured credit union. The listing above shows only the most common ownership types that apply to individual and family shares, and assumes that all NCUA requirements are met.

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How can I keep my share deposits within the NCUA insurance limits?

If you and your family have $250,000 or less in all of your share deposit accounts at the same insured credit union, you do not need to worry about your insurance coverage — your shares are fully insured. A member can have more than $250,000 at one insured credit union and still be fully insured provided the accounts meet certain requirements and are properly structured. In addition, federal law provides for insurance coverage of up to $250,000 for certain retirement accounts.

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What are the basic NCUA coverage limits?*

Single Ownership Accounts (owned by one person with no beneficiaries): $250,000 per member-owner

Joint Ownership Accounts (two or more persons with no beneficiaries): $250,000 per owner (with the primary owner a member of the credit union)

IRAs and other certain retirement accounts: $250,000 per member-owner

Revocable trust accounts: Each member-owner is insured up to $250,000 for each eligible beneficiary named or identified in the revocable trust, subject to limitations and requirements.

Irrevocable trust accounts: Each owner (so long as all owners OR all beneficiaries are members of the credit union) is insured up to $250,000 for each beneficiary named or identified in the irrevocable trust, subject to specific limitations and requirements. Coverdell Education Savings Accounts, formerly education IRAs, are insured as irrevocable trust accounts.

A qualifying eligible beneficiary must be a natural person, or a charitable organization or non-profit entity under the Internal Revenue Code.

*These share insurance coverage limits refer to the total of all shares that account owners have at each federally insured credit union. The listing above shows only the most common ownership types that apply to individual and family shares, and assumes that all NCUA requirements are met.

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Is it possible to have more than $250,000 at one federally insured credit union and still be fully covered?

You may qualify for more than $250,000 in coverage at one insured credit union if you own share accounts in different ownership categories. The most common account ownership categories for individual and family shares are single owner accounts, joint accounts, certain retirement accounts, revocable trust accounts, and irrevocable trust accounts.

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Can insurance coverage be increased by depositing funds with different federally insured credit unions?

Member accounts at each federally insured credit union are insured separately from any accounts held at another federally insured credit union. If an insured credit union has branch offices, the main office and all branch offices are considered one credit union for insurance purposes. A member cannot increase insurance coverage by placing funds at different branches of the same federally insured credit union. Similarly, member accounts held with the Internet division of a federally insured credit union are considered the same as funds deposited with the "brick and mortar" part of the credit union, even if the Internet division uses a different name.

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Can insurance coverage be increased by dividing my funds into several different accounts at the same federally insured credit union?

Share insurance coverage can be increased only if accounts are held in different categories of ownership. These categories include the four most common ownership categories: single owner accounts, retirement accounts, joint accounts, and revocable trust accounts; and less common ownership categories such as irrevocable trust accounts, employee benefit plan accounts, corporation, partnership and unincorporated association accounts, and public unit or government depositor accounts. A credit union member cannot increase federal insurance by dividing funds owned in the same ownership category among different products. For example, the type of products in which a member account is held - whether savings accounts, share draft/checking accounts, or share certificates - has no bearing on the amount of insurance coverage.

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Can insurance coverage be increased by using a different co-owner's Social Security number on each account or changing the way the owners' names are listed on the accounts?

Using different Social Security numbers, rearranging the order of names listed on accounts or substituting "and" for "or" in joint account titles does not affect the amount of insurance coverage available to account owners.

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How does NCUA determine ownership of funds?

The NCUA relies on "account records" of the federally insured credit union to determine how funds are insured. The NCUA may request supplemental documentation to identify the owners and beneficiaries. These documents may be used by the NCUA to confirm that the funds are actually owned in the manner indicated in the credit union's account records and to determine the amount of insurance coverage.

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What are "account records?"

The "account records" of a federally insured credit union are, for example, account ledgers, signature cards, share certificates, passbooks, and certain computer records.

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What is a single ownership account?

This is a share account owned by one person and titled in that person's name only, with no beneficiaries. All of your single ownership accounts at the same insured credit union are added together and the total is insured up to $250,000. For example, if you have a share draft/checking account and a share certificate at the same insured credit union, and both accounts are in your name only with no beneficiaries named, the two accounts are added together and the total is insured up to $250,000. Note that retirement accounts and trust accounts are not included in this ownership category.

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What is a joint account?

This is a share account owned by two or more people and titled jointly in the co-owners' names only, with no beneficiaries. If all co-owners have equal rights to withdraw money from a joint account, a co-owner's share of all joint accounts at the same insured credit union are added together and the total is insured up to $250,000. The primary owner of the joint account must be a member of the credit union, but co-owners are not required to also be members. Note that jointly owned revocable trust accounts are not included in this ownership category.

If a couple has a joint money market account, a joint savings account, and a joint share certificate at the same insured credit union, each co-owner's share of the three accounts are added together and insured up to $250,000 per owner, providing up to $500,000 in coverage for the couple's joint accounts.

Example:John and Mary have three joint accounts totaling $600,000 at a federally insured credit union. Under NCUA rules, each co-owner's share of each joint account is considered equal unless otherwise stated in the credit union's records. John and Mary each own $300,000 in the joint account category, putting a total of $100,000 ($50,000 for each) over the insurance limit.

Joint Account
Account Title	Type of Deposit	Account Balance
Mary and John Smith	MMA	$50,000
John or Mary Smith	Savings	$150,000
Mary Smith or John Smith	Share Certificate	$400,000
Total Deposits		$600,000

Insurance coverage for each owner is calculated as follows:
Account Holders	Ownership Share	Amount Insured	Amount Uninsured
John	$300,000	$250,000	$50,000
Mary	$300,000	$250,000	$50,000
Total	$600,000	$500,000	$100,000

Mary's ownership share in all joint accounts equals $300,000 [1/2 of the MMA ($25,000) plus 1/2 of the savings account ($75,000) plus 1/2 of the Share Certificate ($200,000), for a total of $300,000]. Since her coverage in the joint ownership category is limited to $250,000, $50,000 is uninsured.
John's ownership share in all joint accounts is the same as Mary's, so $50,000 is uninsured.

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What is meant by certain retirement accounts?

These are share accounts owned by one person and titled in the name of that person's retirement plan. The following types of retirement plans are insured in this ownership category:

Any individual retirement account described in section 408(a) (IRA) of the Internal Revenue Code (26 U.S.C. 408(a)) or similar provisions of law applicable to a U.S. territory or possession;
Any individual retirement account described in section 408A (Roth IRA) of the Internal Revenue Code (26 U.S.C. 408A) or similar provisions of law applicable to a U.S. territory or possession; and
Any plan described in section 401(d) (Keogh account) of the Internal Revenue Code (26 U.S.C. 401(d)) or similar provisions of law applicable to a U.S. territory or possession.

All IRA and Roth IRA shares that an individual has in the same insured credit union are added together and the total is insured up to $250,000. Keogh accounts are insured separately up to $250,000.

Note: Naming beneficiaries on a retirement account does not increase share insurance coverage.

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What is a revocable trust account?

A revocable trust account is a share account owned by one or more people that identifies one or more beneficiaries who will receive the deposits upon the death of the owner(s). A revocable trust can be revoked, terminated, or changed at any time, at the discretion of the owner(s). The term "owner" means the grantor, settlor, or trustor of the revocable trust.

This ownership category includes both informal and formal revocable trusts:

Informal revocable trusts — also known as payable on death (POD), in trust for (ITF), testamentary, or Totten Trust accounts — are the most common form of revocable trusts. These informal revocable trusts are created when the account owner signs an agreement — usually part of the credit union's signature card — stating that the deposits will be payable to one or more beneficiaries upon the owner's death.
Formal revocable trust — also known as Living trusts or family trusts — are formal revocable trusts created for estate planning purposes. The owner of a living trust controls the share deposits in the trust during his or her lifetime. The trust document sets forth who shall receive trust assets after the death of the owner.

Share insurance coverage for revocable trust accounts is provided to the owner of the trust. However, the amount of coverage is based on the number of beneficiaries named in the trust and, in some cases, the interests allocated to those beneficiaries, up to the insurance limit. A trust beneficiary can be an individual (regardless of the relationship to the owner), a charity, or a non-profit organization (as defined by the IRS).

Revocable trust coverage is based on all revocable trust deposits held by the same owner at the same credit union, whether formal or informal. If a revocable trust (formal or informal) has more than one owner, in order for each owner to receive NCUSIF coverage, each owner must be a member of the credit union in their own right. If a revocable trust account has more than one member-owner, each member-owner's coverage is calculated separately, using the following rules:

Revocable Trust Share Deposits with Five or Fewer Beneficiaries — Each member-owner's share of revocable trust deposits is insured up to $250,000 for each eligible beneficiary named or identified in the revocable trust (i.e., $250,000 times the number of different beneficiaries), regardless of actual interest provided to beneficiaries.
Revocable Trust Share Deposits with Six or More — Each member-owner's share of revocable trust deposits is insured for the greater of either (1) coverage based on each eligible beneficiary's actual interest in the revocable trust deposits, with no beneficiary's interest to be insured for more than $250,000, or (2) $1,250,000.

Note: Determining coverage for revocable trust accounts that have six or more beneficiaries and provide different interests for the trust beneficiaries can be complicated. Contact the NCUA at 1-800-755-1030 if you need assistance in determining the insurance coverage of your revocable trust.

POD Account Example: Bill has a $250,000 POD account with his wife Sue as beneficiary. Sue has a $250,000 POD account with Bill as beneficiary. In addition, Bill and Sue as co-owners, also both members of the credit union, have a $1,500,000 POD account with their three named children as beneficiaries.

POD Account Example
Account Title	Account Balance	Amount Insured	Amount Uninsured
Bill POD to Sue	$250,000	$250,000	$0
Sue POD to Bill	$250,000	$250,000	$0
Bill and Sue POD to 3 children	$1,500,000	$1,500,000	$0
Total	$2,000,000	$2,000,000	$0

These three accounts totaling $2,000,000 are fully insured because each member-owner is entitled to $250,000 of coverage for each beneficiary. Bill has $1,000,000 of insurance coverage because he names four beneficiaries — his wife in the first account and his three children in the third account. Sue also has $1,000,000 of insurance coverage — $250,000 for each of her beneficiaries — her husband in the second account and her three children in the third account.

When calculating coverage for revocable trust accounts, keep in mind that:

Coverage is based on the number of beneficiaries (and, if the account has six or more beneficiaries, the interests of the beneficiaries) named by each owner. Additional coverage is not provided for the trust owner(s). For example, if a father owns a $750,000 POD account naming his two sons as beneficiaries, the father's account is insured for $500,000 because he is entitled to $250,000 of deposit insurance coverage for each eligible beneficiary he has named in the account. The remaining $250,000 is uninsured. A common misconception is that deposit insurance is determined by counting or adding the total number of individuals listed on a POD account. Coverage is NOT calculated as owners plus beneficiaries times $250,000.
NCUA insurance limits apply to all revocable trust deposits — including all POD/ITF and living trust accounts — that a trust owner has at one insured credit union. In applying the $250,000 per beneficiary insurance limit, the NCUA combines an owner's POD accounts with the living trust accounts that name the same beneficiaries at the same credit union.
NCUA insurance is provided to any co-owner that is a member of the credit union. If a co-owner is not a member of the credit union, coverage is not provided and only the primary member-owner's interest of the funds is insured.

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Single Ownership Accounts

What is a single ownership account?
A single ownership account is a share account owned by one person, with no beneficiaries. Such accounts include shares titled in the owner's name alone, shares established for the benefit of the owner by an agent, nominee, guardian, custodian, or conservator, and shares belonging to the owner of a sole proprietorship.

How are single ownership accounts insured?
All single ownership accounts established by, or for the benefit of, the same person are added together. The total is insured up to a maximum of $250,000, including principal and dividend.

Example of Insurance Coverage for Single Ownership Accounts
Ownership Structure	Share Certificate	Amount Deposited
Jane Smith	Savings account	$25,000
Jane Smith	Share Certificate	$250,000
Jane Smith	Share Draft account	$50,000
Jane Smith's sole proprietorship	MMA	$50,000
Total Deposited		$375,000
Insured Amount		$250,000
Uninsured Amount		$125,000

What is the Uniform Transfer to Minor Act and how are deposit accounts established under this law insured?
The Uniform Transfer to Minor Act is a state law that allows an adult to make a gift to a minor. Funds given to a minor by this method are held in the name of a custodian for the minor's benefit. Funds deposited for the minor's benefit under the Act are added to any other single accounts of the minor, and the total is insured up to a maximum of $250,000.
How are sole proprietorship accounts insured?
These are shares owned by an unincorporated business, in contrast to a business that is incorporated or a partnership. Share accounts owned by a sole proprietor are insured as the single funds of the person who owns the business. So, if an individual has an account in his name alone and another account in the name of his sole proprietorship, the balances in those accounts would be combined and insured up to a maximum of $250,000 in the single ownership account category.
How are decedent estate accounts insured?
Funds of a decedent held in the name of the decedent or in the name of the executor or administrator of the decedent's estate, in one or more accounts, shall be insured up to the SMSIA in the aggregate for all such accounts, separately from the individual accounts of the beneficiaries of the estate or of the executor or administrator. It is important to note that coverage is not provided on a per beneficiary basis. So, even though there might be multiple beneficiaries of the decedent's estate, the account for the decedent would not be insured for more than $250,000.

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Joint Accounts

What is a joint account?
A joint account is a share account owned by two or more individuals, with no beneficiaries. NCUA's share insurance covers joint accounts owned in any manner conforming to applicable state law, such as joint tenants with a right of survivorship, tenants by the entirety, and tenants in common.
What are the requirements for joint accounts?
Joint accounts are insured separately from other ownership categories if all of the following conditions are met:
- All co-owners must be natural persons. This means that legal entities such as corporations or partnerships are not eligible for joint account share insurance coverage. A nonmember may become a joint owner with a member on a joint account with right of survivorship. The nonmember's interest in such accounts will be insured in the same manner as the member joint-owner's interest.
- Each of the co-owners must have personally signed a membership or account signature card. The signature requirement does not apply to share certificates, or to any account maintained by an agent, nominee, guardian, custodian, or conservator on behalf of two or more persons if the records of the credit union properly reflect that the account is so maintained, but the shares must in fact be jointly owned.
- Each of the co-owners must have equal rights to withdraw funds from the account.

How are joint accounts insured?
An individual's (co-owner's) interests in all qualifying joint accounts are added together and the total is insured up to the $250,000 maximum. Each co-owner's interest (or share) in a joint account is deemed equal. The balance of a joint account can exceed $250,000, as long as no owner's share of joint accounts at the same credit union exceeds $250,000. The use of different Social Security numbers does not determine insurance coverage, nor does rearranging the owners' names, changing the style of the names, or using "or" rather than "and" to join the owners' names in a joint account title.

Example of Insurance Coverage for Joint Accounts
Account Title	Owners	Balance
#1	A and B	$250,000
#2	B and A	$120,000
#3	A and B and C	$180,000
#4	A and D	$80,000
Total		$630,000

Each owner's ownership interests in these four joint accounts follow:

Ownership interests in four joint accounts
A's Ownership Interest	Interest
1/2 of the balance in account #1	$125,000
1/2 of the balance in account #2	$60,000
1/3 of the balance in account #3	$60,000
1/2 of the balance in account #4	$40,000
Total of A's Ownership Interest	$285,000

A's ownership interest in the joint account category is $285,000. This amount is more than the $250,000 maximum, so $250,000 is insured and $35,000 is uninsured.

B's Ownership Interest
B's Ownership Interest	Interest
1/2 of the balance in account #1	$125,000
1/2 of the balance in account #2	$60,000
1/3 of the balance in account #3	$60,000
Total of B's Ownership Interest	$245,000

B's ownership interest in the joint account category is $245,000. That amount is less than the $250,000 maximum, so B is fully insured.

C's Ownership Interest
C's Ownership Interest	Interest
1/3 of the balance in account #3	$60,000
Total of C's Ownership Interest	$60,000

C's ownership interest in the joint account category is $60,000. That amount is less than the $250,000 maximum, so C is fully insured.

D's Ownership Interest
D's Ownership Interest	Interest
1/2 of the balance in account #4	$40,000
Total of D's Ownership Interest	$40,000

D's ownership interest in the joint account category is $40,000. That amount is less than the $250,000 maximum, so D is fully insured.

Summary of Insurance Coverage for Joint Accounts
Owner	Ownership Interest	Insured	Uninsured
A	$285,000	$250,000	$35,000
B	$245,000	$245,000	$0
C	$60,000	$60,000	$0
D	$40,000	$40,000	$0
Total	$630,000	$595,000	$35,000

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Certain Retirement Accounts

What certain retirement accounts are insured?
Certain Retirement accounts are a separate account ownership type, and include shares in the following types of accounts:
- Any individual retirement account described in section 408(a) (IRA) of the Internal Revenue Code (26 U.S.C. 408(a)) or similar provisions of law applicable to a U.S. territory or possession;
- Any individual retirement account described in section 408A (Roth IRA) of the Internal Revenue Code (26 U.S.C. 408A) or similar provisions of law applicable to a U.S. territory or possession; and
- Any plan described in section 401(d) (Keogh account) of the Internal Revenue Code (26 U.S.C. 401(d)) or similar provisions of law applicable to a U.S. territory or possession.
How are certain retirement accounts insured?
IRA and Roth IRA accounts will be combined together and insured in the aggregate up to $250,000. A Keogh account will be separately insured from an IRA account, Roth IRA account or, where applicable, aggregated IRA and Roth IRA accounts.
How are Coverdell IRAs or Health Savings Accounts insured?
Coverdell Education Savings Accounts (formerly known as an Education IRAs), Health Savings Accounts and Medical Savings Accounts are not included in the certain retirement account ownership category. Depending on the structure, these accounts may be included in the single account or trust account ownership category.

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Revocable Trust Accounts

What is a revocable trust account?
A revocable trust account is a share account that indicates an intention that the funds will belong to one or more beneficiaries upon the death of the owner (grantor/settlor/trustor). There are both informal and formal revocable trusts:
- Informal revocable trusts — often called payable on death (POD), Totten trust, or in trust for (ITF) accounts — are created when the account owner signs an agreement, usually part of the credit union's signature card, stating that the funds are payable to one or more beneficiaries upon the owner's death.
- Formal revocable trusts — known as living or family trusts — are written trusts created for estate planning purposes. The owner (also known as a grantor, settlor or trustor) controls the funds in the trust during his or her lifetime and reserves the right to revoke the trust.

How are revocable trust accounts insured?
Share insurance coverage for revocable trust accounts is provided to the owner of the trust. However, the amount of coverage is based on the number of beneficiaries named in the trust and, in some cases, the interests allocated to those beneficiaries, up to the insurance limit. A trust beneficiary can be an individual (regardless of the relationship to the owner), a charity, or a non-profit organization (as defined by the IRS).

Revocable trust coverage is based on all revocable trust accounts held by the same owner at the same insured credit union, whether formal or informal. If a revocable trust account has more than one owner, in order for each owner to receive insurance coverage, each owner must be a member of the credit union. Each member-owner's coverage is calculated separately, using the following rules:

Revocable Trust Share Deposits with Five or Fewer Beneficiaries — Each member-owner's ownership interest of the revocable trust is insured up to $250,000 for each eligible beneficiary named or identified in the revocable trust (i.e., number of member-owners times $250,000 times the number of different beneficiaries), regardless of actual interest provided to beneficiaries. (If only one owner of a multiple owner revocable trust account is a member of the credit union then the calculation is 1 x $250,000 x the number of different beneficiaries.)
Revocable Trust Share Deposits with Six or More Beneficiaries — Each member-owner's ownership interest of the revocable trust is insured for the greater of either (1) coverage based on each eligible beneficiary's actual interest in the revocable trust, with no beneficiary's interest to be insured for more than $250,000, or (2) $1,250,000.

Example — POD Accounts with One Owner
Account Title	Account Balance	Amount Insured	Amount Uninsured
John Smith POD to son	$250,000	$250,000	$0

Explanation: This revocable trust account is insured up to $250,000 since there is one beneficiary who will receive the shares when the owner dies.

Can a revocable trust account have more than $250,000 in insurance coverage?
If a revocable trust account has more than one owner (e.g., husband and wife) or is held for more than one beneficiary, the insured balance of the account can exceed $250,000 and still be fully insured. If there is more than one owner, and all owners are members of the credit union, the NCUSIF will assume that the member-owners' shares are equal unless the share account records state otherwise.

Example — POD Accounts with Multiple Owners and Beneficiaries
Account Title	Account Balance	Amount Insured	Amount Uninsured
Husband and Wife POD 3 children	$1,500,000	$1,500,000	$0
Husband POD wife	$250,000	$250,000	$0
Wife POD husband	$250,000	$250,000	$0
Husband POD niece and nephew	$500,000	$500,000	$0
Husband and wife POD grandchild	$600,000	$500,000	$100,000
Total	$3,100,000	$3,000,000	$100,000

Explanation: All but one account is fully insured. The account naming the one grandchild is insured to $500,000 because each member-owner is entitled to $250,000 insurance coverage for the sole beneficiary.

Living Trust Example: A husband and wife have a living trust leaving all trust assets equally to their three children upon the death of the last owner. All share deposits held in the name of this trust at one federally insured credit union would be covered up to $1,500,000. Each member-owner is entitled to $750,000 of insurance coverage because they each are members of the credit union and they each have three beneficiaries who will receive the trust deposits when both member-owners have died.

What is the share insurance coverage of a revocable trust account when the beneficiaries do not have equal interests?
If a revocable trust has five or fewer beneficiaries, then each member-owner's share of all trust share deposits at one insured credit union is covered up to $250,000 times the number of beneficiaries, regardless of the actual proportional interests set forth in the trust document. For example:

An individual has $750,000 in revocable trust account at one federally insured credit union. The trust document specifies that 60% goes to one child, 30% goes to a second child, and 10% to a third child. The full balance of the trust is insured, because the member-owner receives coverage of $250,000 per beneficiary, regardless of the actual interests set forth in the trust document since there are less than six named beneficiaries.

If a revocable trust has six or more beneficiaries, then each member-owner's share of revocable trust shares is insured for the greater of either (1) the coverage based on each beneficiary's actual interest in the revocable trust deposits, with no beneficiary's interest to be insured for more than $250,000, or (2) $1,250,000. For example:

An individual has $1,400,000 in revocable trust account at one federally insured credit union. The trust document specifies that 50% of the funds will belong to the owner's son and 10% will belong to each of his five grandchildren. Maximum coverage for this depositor's funds is the greater of (1) the coverage based on each beneficiary's actual interest in the revocable trust deposits, with no beneficiary's interest exceeding $250,000, or (2) $1,250,000. In determining the deposit insurance coverage, we first must calculate the coverage based on actual interests:

The amount attributable to the first beneficiary is $700,000 ($1,400,000 X 50%). Of this amount $250,000 is insured and $450,000 is uninsured.
The amount attributable to each of the 5 remaining beneficiaries is $140,000 ($1,400,000 X 10%). Since the amount going to each remaining beneficiary is less than $250,000, this portion is fully insured.
Based on actual interests, the owner is insured for $950,000, leaving $450,000 uninsured.

Revocable Trust Share Deposits $1,400,000
Beneficiary	Beneficiary Interest	Allocated Amount	Insured Amount	Uninsured Amount
Son	50%	$700,000	$250,000	$450,000
GC1	10%	$140,000	$140,000	$0
GC2	10%	$140,000	$140,000	$0
GC3	10%	$140,000	$140,000	$0
GC4	10%	$140,000	$140,000	$0
GC5	10%	$140,000	$140,000	$0
Total	100%	$1,400,000	$950,000	$450,000

The total beneficiaries' interests ($950,000) is then compared with the minimum coverage amount ($1,250,000) for trusts with six or more beneficiaries. Since the coverage based on actual interests is less than $1,250,000, the trust owner's share deposits are insured up to $1,250,000, and only $150,000 is uninsured.

An individual has $2.5 million in revocable trust accounts at one federally insured credit union. The trust document specifies that 10% of the funds will belong to each of her five children and 5% will belong to each of her 10 grandchildren. As before, we must first calculate the coverage based on actual interests:
- The amount attributable to each of the first 5 beneficiaries is $250,000 ($2,500,000 X10% (each child's share)). Since this amount is at the maximum coverage an owner can receive per beneficiary, the shares attributable to these beneficiaries are fully insured. The amount attributable to each of the remaining 10 beneficiaries is $125,000 ($2,500,000 X 5% (each grandchild's share)). Since this amount is less than the $250,000 per-beneficiary limit, the shares attributable to the remaining beneficiaries are also fully insured.
The total beneficiaries' interests ($2,500,000) is then compared with the minimum coverage amount ($1,250,000) for trusts with six or more beneficiaries. Since the coverage based on actual interests is greater than $1,250,000, the trust is insured based on the $2,500,000 actual interests, not the minimum amount.

For a formal living (or family) trust, how is a beneficiary's life estate interest insured?
Living trusts often give a beneficiary the right to receive income from the trust or to use trust assets during the beneficiary's lifetime (known as a life estate interest). When the beneficiary with the life estate interest dies, the remaining assets pass to other beneficiaries. A life estate interest is insured up to $250,000, separate from the interests of the other remaining beneficiaries. For example:
- A husband creates a living trust giving his wife a life estate interest in the trust assets, with the remaining assets to belong equally to the couple's two children upon both parent's death. Deposits held in the name of this trust would be insured up to $750,000 ($250,000 for each beneficiary — the wife and two children).
Are living trust accounts and POD accounts separately insured?
The $250,000 per beneficiary insurance limit applies to all revocable trust accounts — POD and living trust accounts — that an owner has at the same insured credit union. For example:
- A father has a POD account with a balance of $400,000 naming his son and daughter as beneficiaries. He also has a living trust account with a balance of $200,000 naming the same beneficiaries. The funds in both accounts would be added together and $300,000 would be attributable as the beneficial interest of each child. Therefore, the two accounts together would be insured for $500,000 ($250,000 per beneficiary) and uninsured for $100,000.