Before I retired, I used to worry about how safe my investments are and whether I could really count on a good return in retirement. Now that I am retired, that worry has actually intensified, as I’m counting on yesterday’s earnings to see me through. What’s your first thought when you consider the question, “Are your investments safe?”

You might think about federally insured deposit accounts through National Credit Union Share Insurance Fund (NCUSIF). That’s a logical and comforting first thought for most credit union members, because your deposit accounts are covered up to a total of $250,000, and not one depositor has ever lost money in a deposit account that is covered by NCUSIF.

But deposit accounts are not usually considered investments. Investments generally involve market risk, such as money invested in the stock market or mutual funds.

So, your first thought might be about your investments that are at risk in the stock market.

The performance of any particular investment in comparison to others of the same type, and to its own historical returns, is another way to consider safety. It’s well established that there’s an element of risk in all financial investments, and none are 100% safe from loss. However, it’s also important to understand whether or not your credit union investments are insured. New Jersey investment advisor Linda Goin gives a clear explanation:

“The NCUSIF does not insure the money individuals invest in stocks, bonds, municipal bonds, or other securities such as mutual funds (including money market mutual funds, and mutual funds that invest in stocks, bonds and other securities); annuities or insurance products such as automobile and life insurance, even if these products were purchased at a federally insured credit union or through an affiliated broker/dealer/insurance agent that is offering these products on behalf of a federally insured credit union.

“The NCUSIF also does not insure U.S. Treasury bills, bonds, or notes; but these items are backed by the full faith and credit of the U.S. government. Also, the NCUSIF doesn’t cover valuables in safe deposit boxes. These contents, however, may be covered by a box holder’s personal homeowner’s insurance.”

So, to review, these are the types of member share accounts and deposits a credit union handles in its usual course of business, and the ones covered by NCUSIF:

1.)   Regular shares (savings accounts)

2.)   Share certificates

3.)   Sharedraft accounts (checking accounts)

But any investment products a credit union offers, such as mutual funds, annuities, and other non-deposit investments are not insured by the NCUSIF.

As a member at Afena, I know my checking and savings accounts are insured by NCUSIF. This insurance also covers my retirement savings in Traditional IRAs and Roth IRAs, which are insured separately from my regular (non-retirement) accounts. But I also know that the investment accounts in the stock market that I set up with the help of Florence Brown, a financial advisor who has partnered with Afena to offer financial planning services to members, don’t have that same guarantee. That element of risk is also why I enjoy higher returns on those investments. Knowing what is “safe” and what isn’t is one very important part of financial planning.