Excess Share Insurance
What Is Excess Share Insurance?
Excess share insurance provides additional deposit protection beyond the standard federal insurance limit for credit union accounts. This extra coverage protects deposits that exceed the typical insurance limit of $250,000 per member.
It is often provided through private insurance companies such as American Share Insurance.
Why It Matters
For individuals and organizations holding large balances at credit unions, excess share insurance provides additional financial protection. Without this extra coverage, deposits above the standard insurance limit could be at risk if a credit union fails.
This protection is particularly useful for businesses or members with high account balances.
How Excess Share Insurance Works
Credit unions that offer excess share insurance purchase coverage from private insurance providers.
This coverage protects deposits beyond the federal insurance threshold.
For example:
- the first $250,000 may be insured through the NCUA
- additional funds may be insured through excess coverage
The exact coverage limits depend on the insurance provider and the credit union’s policy.
Excess Share Insurance vs Federal Deposit Insurance
- Excess share insurance protects deposits beyond federal limits.
- Federal deposit insurance protects deposits up to the standard coverage limit.
Both work together to expand deposit protection.
FAQs About Excess Share Insurance
Is excess share insurance required?
No, it is optional and depends on the credit union.
Who benefits from excess share insurance?
Members with balances exceeding federal insurance limits.
Is excess share insurance government backed?
Typically it is provided by private insurers.
Related Terms
