What Is Cryptocurrency and Is It Safe?

Confused about cryptocurrencies? You’re not alone. Let’s take a look at what a cryptocurrency is and the safety of using these types of accounts and investments versus other options available.

What is cryptocurrency?

Cryptocurrency is a type of digital currency that generally exists only electronically and is used on your phone or computer. Some people use cryptocurrency to make quick payments, shop online or as an investment. You may be wondering if it’s a safe, secure way to manage your money.

Is cryptocurrency safe and insured?

Cryptocurrency accounts are not insured by a government like U.S. dollars deposited into an NCUA Insured Credit Union or FDIC insured bank account. If something happens to your account or the cryptocurrency market the government has no obligation to step in and help get your money back. At Northern, your deposits are insured by the National Credit Union Association (NCUA). The NCUA is a U.S. government agency that allows Credit Union members up to $250,000 of insurance per individual depositor. Your money is protected at Northern no matter what’s happening on Wall Street or with the economy.

Are payments made with cryptocurrency safe from fraud?

Cryptocurrency payments do not come with legal protections. Credit cards and debit cards have legal protections if something goes wrong. For example, if you need to dispute a purchase, your credit card company has a process to help get your money back. Cryptocurrencies typically do not come with any such protections. Credit cards also offer rewards, purchase protection and the ability to back out of a purchase you’ve decided against. You can also contest fraudulent charges on your account, freeze your credit on a compromised card or even close the card completely.

Does the value of cryptocurrency fluctuate?

The value of cryptocurrency changes constantly and is more volatile than more traditional investments. Scammers will guarantee large profits and big returns on your investment, but if the value goes down, there is no guarantee it will go back up again. If you are interested in investing, there are more secure ways to plan for your future.

When you keep your money at a Credit Union you have a dedicated team to help with your financial goals and security. As a not-for-profit community-focused credit union we aren’t focused on generating profit for the bottom line, but instead on providing an institution for member-owners to gain information and professional guidance­ to make the best possible financial decisions for their families.

At Northern, your peace of mind is our top priority. If you have any questions about account security please do not hesitate to contact us by call or text at 315.782.0155, connect with us via Video Banking or visit any of our relationship centers.