Advertisement
credit & debt

How Deposit Insurance Protects Savers

Your money is safe, but there are reasons we are removing CDs from our tables.

For several months, CDs from Melrose Credit Union have appeared at or near the number-one spot on our table of top-yielding certificates of deposit. Recently, the National Credit Union Administration, an independent federal agency that oversees credit unions, announced that it had taken Melrose into conservatorship because of “unsafe and unsound practices.”

That may set off alarm bells if you are a yield-starved saver who invested your money in Melrose CDs, but be assured that your money is safe. Money held in deposit accounts at Melrose is federally insured up to the limits prescribed by the National Credit Union Share Insurance Fund, which is the credit union equivalent of Federal Deposit Insurance Corp. coverage for bank accounts. An individual’s deposits at a credit union are insured for up to a combined $250,000 in all deposit accounts—including CDs as well as checking and savings accounts. Joint accounts come with separate coverage of $250,000 for each depositor listed on the accounts. IRAs and trusts come with their own insurance limits, too. At www.mycreditunion.gov/estimator, you can use a tool to calculate whether your deposits are fully insured.

Advertisement - Article continues below

Until Melrose’s financial troubles are resolved, we are removing its CDs from our tables. New York–based Melrose has suffered heavy losses related to loans for taxi medallions, which taxi operators purchase to license their services. (The taxi industry is under pressure from ride-sharing services such as Uber and Lyft.) If a troubled credit union can’t resolve its issues, then it will liquidate, and the NCUA will either transfer accounts to a credit union that has agreed to acquire them or send checks to customers for their insured deposits. (See also 7 Great Credit Unions Anyone Can Join).

Advertisement
Advertisement

Most Popular

11 Dividend-Paying Stocks You Should Think Twice About
dividend stocks

11 Dividend-Paying Stocks You Should Think Twice About

Dividend-paying stocks often can be a store of safety, but 2020 has been difficult on income equities. These 11 picks look like shaky plays despite th…
September 21, 2020
Medicare Basics: 11 Things You Need to Know
Medicare

Medicare Basics: 11 Things You Need to Know

There's Medicare Part A, Part B, Part D, medigap plans, Medicare Advantage plans and so on. We sort out the confusion about signing up for Medicare --…
September 16, 2020
Where You Should Invest Now
investing

Where You Should Invest Now

Kiplinger.com senior investing editor Kyle Woodley joins our Your Money's Worth podcast to answer investor questions about tech stocks, the election a…
September 22, 2020

Recommended

High-Tech Aids for Aging in Place
Caregiving

High-Tech Aids for Aging in Place

Apple Watch and other technology provides fast feedback, comfort for older users, and a powerful assist for caregivers.
September 23, 2020
When Is Amazon Prime Day 2020?
spending

When Is Amazon Prime Day 2020?

Circumstances beyond its control have forced Amazon to move its annual Christmas-in-July Amazon Prime Day blowout sale in 2020 to ... later. Is Oct. …
September 22, 2020
A Step-by-Step Guide to Being an Estate Executor
retirement

A Step-by-Step Guide to Being an Estate Executor

Whether you’re planning ahead for your own heirs or have been asked to serve as an executor of an estate for someone else, it pays to understand what …
September 17, 2020
10 Things You'll Spend More on in Retirement
retirement

10 Things You'll Spend More on in Retirement

From reading materials to debt, the demands on your savings during your golden years might surprise you.
September 16, 2020