How to Confirm FDIC or NCUA Insurance

More and more local banks are turning to the internet to entice deposits, offering high yields and favorable loans terms. But how do you know if a bank is legit? Ask the FDIC.

To recap, FDIC insurance covers bank and NCUA insurance covers credit unions. Not all credit unions are insured by the NCUA, the ones that aren’t often have insurance from American Share Insurance (ASI), which isn’t backed by the US Government.

How to confirm FDIC insurance: The best and only way you can confirm that a bank is FDIC insured is by using the FDIC’s Bank Find tool. The search will tell you whether or not the bank is in the database but it’s not very robust because it does a broad match search. If you search for ING, as in ING Direct, you’ll get every bank with ‘ing’ in its name which is is pretty much every single bank with the word “Savings” in it.

An alternative is if you go to the site and find the FDIC certificate number. On the FDIC Bank Find page, click on “More Search Options” and you can enter the certificate number. ING Direct’s certificate number is 35489 and that search show they have been FDIC insured since 8/4/2000.

Sometimes a bank operates as a subsidiary of another bank and you’ll have to receive confirmation from the FDIC in those rare cases. One example was Dollar Savings Direct, which operates as a subsidiary of Emigrant Bank and using the same certificate number. Dollarsavingsdirect.com isn’t listed on the certificate, so you shouldn’t take their word for it that they are covered. My blog’s readers managed to get the official word on Dollar Savings Direct’s status from the FDIC after numerous attempts.

How to confirm NCUA insurance: The NCUA has a similar Find a Credit Union search that lets you find the credit union you’re interested in. Again, the search is broad match so it might be easier to get the Charter Number of the credit union and entering it directly.

How to confirm ASI insurance: Finally there’s ASI and you can search for credit unions insured by ASI at their credit union search. FDIC and NCUA are effectively backed by the full faith and credit of the United States, ASI is not. It should be noted that no member has ever lost any insured savings either since they started offering deposit insurance since 1974. Another distinction between ASI and FDIC/NCUA is that ASI does not perform any regulatory function, unlike the FDIC/NCUA.

The next time you see a bank or credit union with some offer that looks too good to be true, confirm that the bank is covered by the insurance it says its covered by. While it hasn’t happened in a long time in the United States, it’s not unheard of for a bank to turn out to be a fraud (Ponzi schemes are popular these days!).

Jim writes about personal finance at Bargaineering.com.

(Photo: zieak)

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  1. Julia789 says:

    What if someone carefully selected a bank with FDIC insurance, and the bank lost the insurance at a later time? Would they be required by law to notify all account holders? If so, what if they didn’t follow through? Would the account holders have any recourse?

    With more and more people signing up with “online” banks for savings accounts, one has to wonder if these online banks are legit, or going to fail shortly like some fly-by-night company.

    • dragonpup says:

      @Julia789: The FDIC’s website lists the bank’s website when you pull the records. For example, this is how my bank’s records looked:

      Brookline Bank has been FDIC insured since September 3, 1957.
      It was established on January 1, 1871.
      Its main office (headquarters) is located at:
      160 Washington Street
      Brookline, Massachusetts 02445
      County of Norfolk

      Check to locate Branches Offices by state.

      Brookline Bank’s reported (or primary) website: [www.brooklinebank.com:80]

  2. Eyebrows McGee (now with double the baby!) says:

    Woah, my credit union has $3 billion in assets. Them’s crazy numbers!

  3. Anonymous says:

    Holy crap, E*Trade Bank has been around since 1933? That and other fun facts on the check it out page.

    History of E*trade Bank:
    1/1/1933 Institution established. Original name: Metropolitan Federal Savings And Loan Association

    6/12/2001 Changed name to E*trade Bank.

  4. joegrind says:

    Thanks for the tip.
    Just tried to see if Redneck Bank ([redneckbank.com]) is listed. They are not. Bankrate.com has them as the best rate on savings and checking. According to redneck’s website, they are FDIC insured.
    One thing I look for is to make sure it is [] (redneck isn’t) and they list their address as a PO box. Besides the name, it is just fishy.

  5. joegrind says:

    ht.tp.s should have been in there

  6. Mr.Compliance says:

    Not only knowing your bank is covered by FDIC/NCUA, but understand the insurance coverage limits. The insurance brouchure is also available on the FDIC/NCUA websites.

    The FDIC has notified banks cease and desist orders against banks who may be practicing unsafe practices and threaten further action against the institution.

    To asertain a banks legitamacy, you may be better of working with a traditional ‘brick and mortar’ bank that offers online banking services. On-line only banks may not even be based in the US.

    FYI… Recent FDIC regulations propose to limit the rates on certificate of deposits or brokered deposits (CD sales through a broker-dealer) for banks that are not considered to be ‘well-capitalized’. Banks will have to charge a rate no higher than a national average or a ‘local’ average rate without FDIC approval. A national CD rate would collected by the FDIC and published on the FDIC website.