Bank sign on building

Does condo law require condo reserve funds to be deposited only in FDIC-Insured institutions, or may NCUA-insured institutions (credit unions) be used?


Generally, I am not aware of any laws requiring reserve funds to be FDIC or NCUA insured. However, good practice would dictate that funds are invested conservatively and fully insured by the financial institution where the funds are deposited.

David G. Hellmuth
Attorney at Law
P: (952) 746-2107
F:  (952) 941-2337
8050 West 78th Street 
Edina, MN 55439

No specific law requires condominium reserve funds to be deposited in particular types of institutions. The guiding principle is the role of the Board of Managers as fiduciaries of the condominium association. As fiduciaries, they have special duty to preserve the assets of the association. For that reason, most Boards invest reserves in more conservative assets, such as CD’s or other types of accounts with insurance coverage in the event of an institutional failure.

Kenneth Jacobs
Smith, Buss & Jacobs LLP
733 Yonkers Avenue
Yonkers, NY 10704
914-476-0600 X4102

There is no requirement in PA law that reserve funds be deposited in any particular type of account or financial institution. Rather, state law only provides that the Board should ensure such reserves as are necessary and appropriate. Of course what is necessary and appropriate will vary from Association to Association depending on the Association’s maintenance responsibilities, age of common property, and the like.

Sara A. Austin
Austin Law Firm LLC
226 E. Market St.
York, PA 17403
717.846.2246 phone
717.846.2248 fax


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