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Insuring Peace of Mind

March 15, 2013

Measures have been taken by the federal government and private insurance funds to protect deposits made at bank and credit unions to ensure that your money is safe, should the insured financial institution shutter its doors.

Federal Government Insurances
Depositors of insured banks are covered by the Federal Deposit Insurance Corporation (FDIC), dollar-for-dollar, including the principal balance and any interest accrued, up to the insurance limit. Standard deposit insurance covers up to $250,000 per depositor, per insured bank, per account ownership category. No depositor has ever lost a penny of FDIC-insured deposits since the agency began operations in 1934.

Federally insured credit union members are protected by the National Credit Union Administration (NCUA) Share Insurance Fund, a U.S. Government Agency which also insures deposits of up to $250,000. Like FDIC, the NCUA has been a reliable form of insurance for credit union members, as none have ever lost their federally insured deposits.

Members of uninsured credit unions may recover a portion of their deposits in the event of a credit union closure, but there is no guarantee. The amount recovered is based on the recovery of the failed credit union's assets, a determination that could take years. Payments may be doled out periodically for uninsured shares claims while the credit union's assets are being tabulated.

What does the FDIC and NCUA cover?
FDIC deposit insurance and NCUA Share Insurance Fund cover all types of deposits, up to $250,000, received at an insured bank or credit union, respectively, including deposits in:

  • a checking account
  • a negotiable order of withdrawal (NOW Account)
  • a savings account
  • a money market deposit account
  • a time deposit such as a certificate of deposit (CD)
  • joint accounts (up to $250,000 per account holder)
  • Individual Retirement Accounts (IRAs) including traditional IRAs, Roth IRAs, Simplified Employee Pension (SEP) IRAs, and Savings Incentive Match Plans for Employees (SIMPLE) IRAs

FDIC deposit insurance and NCUA do NOT cover money invested in:

  • stocks
  • bonds
  • mutual funds
  • life insurance policies
  • annuities or municipal securities
  • repurchase agreements

Additional Massachusetts Insurances
Deposits exceeding FDIC insurance limits at co-operative banks in Massachusetts are fully insured by The Share Insurance Fund (SIF), a private, industry-sponsored fund (all SIF member banks are also insured for up to $250,000 by the FDIC). Depositors are automatically granted the added insurance benefit when they make a deposit at a SIF member bank.

The Depositors Insurance Fund (DIF) is a similar private fund in place for customers at savings banks in Massachusetts whose deposits exceed the amount insured by the FDIC.

The Massachusetts Credit Union Share Insurance Cooperation (MSIC) fully insures excess deposits above the federal insurance limit of $250,000 at all Massachusetts member credit unions.

Protect Your Deposits
Insurances are in place to give you peace of mind when it comes to your finances. Talk to your financial institution to ensure your deposits are insured in full, or visit:

James Oosterman is the Vice President of Melrose Bank. He can be reached by telephone 781-665-2500, online at or on Facebook at

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