Product Overview

What is an Extended Insurance Account? An Extended Insurance Account provides extended NCUA insurance on member deposits by distributing their balances in amounts under the $250,000 threshold to partner credit unions in the ModernFi Network. By remaining under the $250,000 threshold, each account remains fully insured by the NCUA. These accounts combine to provide members with millions of extended insurance coverage.

How does the Extended Insurance Account work? Suppose a member has $1 million they want to safeguard and earn interest on. They can achieve this by depositing the full amount with your credit union through an Extended Insurance Account. Once the account is funded, funds are split into smaller portions and placed in demand deposit accounts at various credit unions within the network. For example, the first $250,000 could be allocated to your credit union, another $250,000 to Credit Union 2, an additional $250,000 to Credit Union 3, and the remaining $250,000 to Credit Union 4. These credit unions are all part of the ModernFi Network, ensuring that each deposit is covered by NCUA insurance, up to the maximum of $250,000 per share owner per credit union.

Using the Extended Insurance Account eliminates the need to keep track of multiple accounts at various credit unions since member deposits are consolidated into one statement. Additionally, the account’s interest rate is competitive, making it a compelling choice for individuals and institutions with substantial cash reserves.

Who maintains my Extended Insurance Account? Members can control the account just like a regular transaction account. Deposit, withdraw, or transfer funds at any time at your credit union or through the depositor portal. Your credit union manages and oversees the Extended Insurance Account, ensuring funds are distributed to other institutions within the deposit network.

How secure is the Extended Insurance Account? Extended Insurance Accounts offer a high degree of security for depositors, utilizing NCUA insurance to safeguard funds up to $250,000 per member at each participating credit union. This protection extends even in the event of a participating credit union’s failure, ensuring the continued safety of your members’ deposits. Since the inception of the National Credit Union Share Insurance Fund in 1970, no member has lost NCUA-insured funds due to a credit union's failure. All accounts at NCUA-insured credit unions are covered on a dollar-for-dollar basis, encompassing principal plus any interest accrued.

In the unlikely event a credit union fails, the NCUA assumes the responsibility of closing the credit union, receives its assets, and settles all deposit claims. Your credit union works with ModernFi to file all required materials with the NCUA to coordinate the receipt of your funds from the failed institution. Payment starts within a few business days after the credit union closure. For more information on NCUA insurance, please visit here.

How do members open an Extended Insurance Account? Opening an Extended Insurance Account is quick and easy. Members will simply contact you or visit a branch to open an account and start taking advantage of the benefits offered by the Extended Insurance Account. Members will sign the Account Opening Agreement and Terms and Conditions, at which point your ModernFi lead will alert ModernFi of the new account and the deposit amount.

Steps for members to open the Extended Insurance Account:

1. Member signs Account Opening Agreement and Terms & Conditions: The member should carefully review, complete, and sign the Account Opening Agreement and Terms & Conditions. This document outlines the details of the Extended Insurance Account, discloses that the member’s deposits may be swept to the deposit network, and ensures that all necessary member information is collected. The Account Opening Agreement and Terms & Conditions will be available through your ModernFi lead. Once the documents are completed, your ModernFi lead will import them into the ModernFi Admin Portal, at which point the Extended Insurance Account is opened.
2. Member receives access to “Member Portal”: Once the account is opened, the member will receive an email inviting them to the “Member Portal”. This online portal allows them to view their balance allocations, request withdrawals, make changes to their account, and view statements.