FDIC vs. SIPC Protection

FDIC insurance applies to covered deposit products at an FDIC-insured bank. The standard limit is $250,000 per depositor, per insured bank, for each account ownership category; deposits in the same category at the same bank are aggregated for the calculation.

Checking accounts, savings accounts, money market deposit accounts, and certificates of deposit can be covered when the institution and account qualify. Stocks, bonds, mutual funds, ETFs, crypto assets, and the contents of safe-deposit boxes are not turned into insured deposits merely because a bank sells or displays them.

SIPC states that it protects customers if a SIPC-member brokerage fails and customer securities or cash held for purchasing securities are missing. Its statutory limit is $500,000 per customer capacity, including a $250,000 limit for cash.

SIPC does not reimburse a decline in the market value of a security, a failed investment strategy, unsuitable advice, or promised performance. Protection depends on the firm, account capacity, asset, and claim; excess private insurance, if advertised by a broker, has its own terms.

Uninvested brokerage cash may remain as a broker cash balance, enter a money market mutual fund, or be swept to one or more banks. Those arrangements can lead to different protections, limits, interest calculations, and access mechanics.

Read the brokerage’s current cash-sweep and account disclosures. Confirm SIPC membership directly, identify each receiving bank in an FDIC sweep, consider other deposits held at those banks, and do not infer FDIC insurance for a money market mutual fund.

Name the institution, legal product, account ownership or customer capacity, and failure scenario. Those four facts are more useful than the app screen where the balance appears.

For bank sweeps, identify every receiving bank and aggregate other deposits held there in the same ownership category. For brokerage assets, confirm SIPC membership and whether the asset is a protected security or qualifying cash claim.