SIPC has recovered billions of dollars for investors. Our job is to recover missing cash or securities if your brokerage firm has gone out of business.
SIPC has issued Investor Bulletins explaining SIPC’s protection and claims process. Click here for Part I ("SIPC Basics"). Click here for Part II ("Filing a SIPC Claim").
SIPC does not protect digital asset securities that are investment contracts that are not registered with the U.S. Securities and Exchange Commission, even if held by a SIPC member brokerage firm.
FAQs
SIPC protects cash in a customer's brokerage firm account resulting from the sale of a customer's securities or held in a customer's account for the purchase of securities. Cash held in connection with a commodities trade or a currency trade is not protected by SIPC.
Is it safe to keep more than $500,000 in one brokerage account? ›
They must also have a certain amount of liquidity on hand, thus allowing them to cover funds in these cases. What this means is that even if you have more than $500,000 in one brokerage account, chances are high that you won't lose any of your money even if the broker is forced into liquidation.
What is the SIPC insurance limit? ›
The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash. Most customers of failed brokerage firms are protected when assets are missing from customer accounts.
What is the SIPC rule? ›
The Securities Investor Protection Corporation (SIPC) protects customers if their brokerage firm fails. Brokerage firm failures are rare. If it happens, SIPC protects the securities and cash in your brokerage account up to $500,000.
What accounts are not covered by SIPC? ›
SIPC protection is available only with respect to cash and securities held in a customer securities accounts at a SIPC-member brokerage firm, and is not available with respect to any assets held in futures accounts.
Which is safer FDIC or SIPC? ›
The SIPC is not better or worse than the FDIC, but it is different. The SIPC is a nonprofit with one goal: to restore securities to investors when brokerage firms fail. Impacted investors need to file a claim before the deadline, and unlike FDIC-insured accounts, the reimbursem*nt process is not automatic.
Has SIPC insurance ever been used? ›
Although not every investor or transaction is protected by SIPC, no fewer than 99 percent of persons who are eligible get their investments back with the help of SIPC.
Why should no one use brokerage accounts? ›
Brokerages tend to offer lower annual percentage yields (APYs) on savings, money market and interest checking accounts than the best online banks. Brokerages typically don't have cash-handling employees in brick-and-mortar locations. Brokerage accounts don't offer all the services that a traditional bank offers.
Is it safe to have a million dollars in a brokerage account? ›
Paying Too Much in Fees Likely Poses a Bigger Risk
However, it may not be the best idea to keep more than $250,000 in cash at a specific brokerage firm. “But when your money's fully invested, you do not have a risk,” Clark says.
Does SIPC apply to each account? ›
SIPC protection of customers with multiple accounts is determined by "separate capacity." Each separate capacity is protected up to $500,000 for securities and cash (including a $250,000 limit for cash only). Accounts held in the same capacity are combined for purposes of the SIPC protection limits.
If a customer exceeds the limits of SIPC insurance, they become general creditors of the broker-dealer. A new coverage is provided for each separate registration. Essentially, a new coverage is obtained when a new owner is involved.
Does SIPC cover retirement accounts? ›
If, for example, you have an IRA account in your name and a joint account with your spouse, the SIPC treats them as separate accounts and insures each up to $500,000. (Unlike with FDIC coverage, joint accounts aren't insured to the full amount for each account holder with SIPC insurance.)
Are all broker-dealers members of SIPC? ›
All registered brokers or dealers are SIPC members by law, with some exceptions.
What is the SIPC limit for Fidelity? ›
SIPC protection is limited to $500,000 and has a cash limit of $250,000. SIPC does not protect against declines in the value of your securities and is not the same as FDIC protection. Before investing, always read a money market fund's prospectus for policies specific to that fund.
Does SIPC cover savings accounts? ›
FDIC insurance protects your assets in a bank account (checking or savings) at an insured bank. SIPC insurance, on the other hand, protects your assets in a brokerage account.
Which of these would not be fully covered by SIPC insurance? ›
Which of these would not be fully covered by SIPC insurance? C, Gold is not a security and is not covered by SIPC. Money markets, ETFs, mutual funds, and junk bonds are all types of securities. According to the Uniform Securities Act, who is charged with enforcing state securities laws and regulations?
What is a downside to using an online brokerage? ›
However, you should also take into account the drawbacks such as technical issues, cybersecurity breaches, emotional trading, and the investor's limited ability to interpret data.
