Questions On SIPC Protection And FDIC
Several readers wanted more information on SIPC and FDIC. Brokerage firms are backed by SIPC and your CD is insured by the FDIC.
The Sunday Wall Street Journal provides details:
Even when a brokerage firm totters, the securities in your brokerage account are generally secure. So investors unnerved by last week's bankruptcy filing by Lehman Brothers Holdings and by Merrill Lynch's abrupt sale to Bank of America can cross at least one worry off their lists.When SIPC gets involved after a failure, funds from the SIPC reserve are available to satisfy remaining claims of up to $500,000 per depositor per account. Of that amount, a maximum of $100,000 on claims for cash is included. If you have a retirement account in addition to other investments at a brokerage firm, each account would be protected up to the $500,000 maximum. For more information, see SIPC.org.
FDIC details from helpwithmybank.gov
All national banks are required to insure customer deposits with insurance from the FDIC. At insured banks, the FDIC insures all deposits up to the insurance limit. This includes money deposited in the following accounts:
- checking accounts
- NOW accounts
- savings accounts
- money market deposit accounts
- certificates of deposit (CDs)
The FDIC does not insure the money you invest in the following products, even if they were purchased from a bank with FDIC insurance:
- stocks
- bonds
- mutual funds
- life insurance policies
- annuities
- municipal securities
Wise Owl