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SIPC Insurance: What It Is, What It Covers
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SIPC Insurance: What It Is, What It Covers
SIPC insurance for brokerage firms is similar to FDIC protection for bank failures. Here’s what is and isn’t covered.
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Dayana is a former NerdWallet authority on investing and retirement. She has written for The Associated Press, The Motley Fool, Woman’s Day, Real Simple, Newsweek, USA Today and more. She has written and contributed to several personal finance books and has been interviewed on the "Today" Show, "Good Morning America," NPR, CNN and other outlets.
Dayana is a former NerdWallet authority on investing and retirement. She has written for The Associated Press, The Motley Fool, Woman’s Day, Real Simple, Newsweek, USA Today and more. She has written and contributed to several personal finance books and has been interviewed on the "Today" Show, "Good Morning America," NPR, CNN and other outlets. Writer + more + more
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14 years of experience Expertise Small business finances investing bankingRobert Beaupre leads the SMB team at NerdWallet. He has covered financial topics as an editor for more than a decade. Before joining NerdWallet, he served as senior editorial manager of QuinStreet's insurance sites and managing editor of Insure.com. In addition, he served as an online media manager for the University of Nevada, Reno.
Robert Beaupre leads the SMB team at NerdWallet. He has covered financial topics as an editor for more than a decade. Before joining NerdWallet, he served as senior editorial manager of QuinStreet's insurance sites and managing editor of Insure.com. In addition, he served as an online media manager for the University of Nevada, Reno. Published in Head of Content, Small Business + more + moreSIPC insurance is insurance that covers up to $500,000 of securities, including up to $250,000 of cash, that a consumer holds in one or more brokerage accounts. SIPC stands for Securities Investor Protection Corporation.
SIPC insurance is insurance that covers up to $500,000 of securities, including up to $250,000 of cash, that a consumer holds in one or more brokerage accounts. SIPC stands for Securities Investor Protection Corporation.SIPC insurance is not the same as FDIC insurance. The main difference between SIPC insurance and FDIC insurance is that SIPC insurance covers money and securities in brokerage accounts, and FDIC insurance covers money in bank accounts.
SIPC insurance is not the same as FDIC insurance . The main difference between SIPC insurance and FDIC insurance is that SIPC insurance covers money and securities in brokerage accounts, and FDIC insurance covers money in bank accounts.» MORE: How to invest $100,000
» MORE: » MORE: How to invest $100,000Brokerage firms
Brokerage firms
Brokerage firmson Charles Schwab's website
on E*TRADE's website
on Vanguard's website
on Fidelity's website
SIPC insurance rules
SIPC insurance rulesFirms that sell stocks and bonds and other investments to the public — as well as the clearinghouses that handle account transactions — are required by law under the Securities Investor Protection Act of 1970 to be members of the SIPC. Customers don’t have to sign up for it, and individual investors can’t purchase extra coverage
Firms that sell stocks and bonds and other investments to the public — as well as the clearinghouses that handle account transactions — are required by law under the Securities Investor Protection Act of 1970 to be members of the SIPC. Customers don’t have to sign up for it, and individual investors can’t purchase extra coverage Administrative Office of the U.S. Courts. Securities Investor Protection Act (SIPA). Accessed Aug 25, 2025. .Scroll to the bottom of nearly any page on a brokerage firm’s site and you should see the SIPC membership disclosure. All of the online brokers we review carry SIPC insurance. If yours doesn't, it may be time to find a new one.
Scroll to the bottom of nearly any page on a brokerage firm’s site and you should see the SIPC membership disclosure. All of the online brokers we review carry SIPC insurance. If yours doesn't, it may be time to find a new one.In the event your broker or robo-advisor financially fails and investors' assets are missing or at risk, the SIPC will step in.
In the event your broker or robo-advisor financially fails and investors' assets are missing or at risk, the SIPC will step in.What SIPC covers
What SIPC coversUp to $500,000 in total coverage per customer (or per account, if the accounts are of separate capacities — more on this below) for lost or missing assets of cash and/or securities from a customer’s accounts held at the institution.
Up to $500,000 in total coverage per customer (or per account, if the accounts are of separate capacities — more on this below) for lost or missing assets of cash and/or securities from a customer’s accounts held at the institution.Up to $250,000 of that can protect cash in a customer's account that is not yet invested in securities.
Up to $250,000 of that can protect cash in a customer's account that is not yet invested in securities.Protection in case of unauthorized trading or theft from an account.
Protection in case of unauthorized trading or theft from an account.What SIPC insurance doesn’t cover
What SIPC insurance doesn’t coverInvestment losses or worthless stocks or other securities.
Investment losses or worthless stocks or other securities.Losses due to account hacking, unless the firm was forced into liquidation due to the hack.
Losses due to account hacking, unless the firm was forced into liquidation due to the hack.Cash held in connection with a commodities trade.
Cash held in connection with a commodities trade.Claims against bad or inappropriate investment advice. The Financial Industry Regulatory Authority, the Securities and Exchange Commission and state securities regulators handle complaints about firms
Claims against bad or inappropriate investment advice. The Financial Industry Regulatory Authority, the Securities and Exchange Commission and state securities regulators handle complaints about firms Securities Investor Protection Corporation. What SIPC Protects. Accessed Aug 25, 2025. .» MORE: Search for a financial advisor near you
» MORE: » MORE: Search for a financial advisor near youSIPC vs. FDIC: What is and isn’t covered
SIPC (brokerage firms)
SIPC (brokerage firms)
SIPC (brokerage firms)FDIC (banks)
FDIC (banks)
FDIC (banks)Coverage amount
Coverage amountUp to $500,000 per customer, which includes a maximum $250,000 of cash coverage. For customers with multiple accounts, protection is determined by whether those accounts are of separate capacity.
Up to $500,000 per customer, which includes a maximum $250,000 of cash coverage. For customers with multiple accounts, protection is determined by whether those accounts are of separate capacity.Up to $250,000 per depositor, per institution and per ownership category
Up to $250,000 per depositor, per institution and per ownership categoryWhat is covered
What is coveredStocks, bonds, Treasury securities, certificates of deposit, mutual funds, money market mutual funds held at an SIPC member firm
Stocks, bonds, Treasury securities, certificates of deposit, mutual funds, money market mutual funds held at an SIPC member firmMoney in deposit accounts, including checking and savings accounts, money market deposit accounts (not money market mutual funds), certificates of deposit
Money in deposit accounts, including checking and savings accounts, money market deposit accounts (not money market mutual funds), certificates of depositWhat isn’t covered
What isn’t coveredInvestment losses.
Investment losses.Investments in commodity futures, fixed annuities, currency, hedge funds or investment contracts (e.g., limited partnerships) not registered with the SEC.
Investments in commodity futures, fixed annuities, currency, hedge funds or investment contracts (e.g., limited partnerships) not registered with the SEC.Accounts of partners, directors, officers or those with a significant/beneficial ownership in the failed firm.
Accounts of partners, directors, officers or those with a significant/beneficial ownership in the failed firm.Crypto and other digital assets that are unregistered investment contracts do not qualify as “securities” under SIPA and are therefore not protected under SIPA, even if held by a SIPC-member brokerage firm.
Crypto and other digital assets that are unregistered investment contracts do not qualify as “securities” under SIPA and are therefore not protected under SIPA, even if held by a SIPC-member brokerage firm.Mutual fund investments (stock, bond or money market), stocks, bonds, Treasurys and other investment products purchased at a bank, brokerage or dealer.
Mutual fund investments (stock, bond or money market), stocks, bonds, Treasurys and other investment products purchased at a bank, brokerage or dealer.Annuities.
Annuities.Life insurance policies.
Life insurance policies.Safe deposit box contents.
Safe deposit box contents.Who is covered
Who is coveredU.S. and non-U.S. citizens with accounts at a member institution
U.S. and non-U.S. citizens with accounts at a member institutionU.S. and non-U.S. citizens with accounts at a member institution
U.S. and non-U.S. citizens with accounts at a member institutionIs it safe to have more than $500,000 in a brokerage account?
Is it safe to have more than $500,000 in a brokerage account?That depends on your account balance. Remember, SIPC coverage is limited to $500,000 total per customer. However, if you have more than that at the institution, you may still be insured for a greater amount based on:
That depends on your account balance. Remember, SIPC coverage is limited to $500,000 total per customer. However, if you have more than that at the institution, you may still be insured for a greater amount based on:How the accounts are titled. The “per-customer” rule of coverage is based on ownership capacity. If, for example, you have an IRA 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.) Other examples of separate capacity include accounts held for a trust or a corporation, by a guardian for a ward or minor or by an estate executor. A margin account is not considered a separate capacity.
How the accounts are titled. How the accounts are titled. The “per-customer” rule of coverage is based on ownership capacity. If, for example, you have an IRA 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.) Other examples of separate capacity include accounts held for a trust or a corporation, by a guardian for a ward or minor or by an estate executor . A margin account is not considered a separate capacity.The amount of cash in the account. Claims on cash are capped at $250,000. That $250,000 counts toward the full $500,000 policy. SIPC protection may not be adequate if you keep a lot of cash in your account. Money market funds and certificates of deposit (CDs) are considered an investment and not cash under the rules.
The amount of cash in the account. The amount of cash in the account. Claims on cash are capped at $250,000. That $250,000 counts toward the full $500,000 policy. SIPC protection may not be adequate if you keep a lot of cash in your account. Money market funds and certificates of deposit (CDs) are considered an investment and not cash under the rules.If after adding up your assets in all their separate and combined capacities it turns out SIPC coverage falls short, consider moving a portion of your money to a different institution. (Here are instructions on how to switch brokers and move your investments.)
If after adding up your assets in all their separate and combined capacities it turns out SIPC coverage falls short, consider moving a portion of your money to a different institution. (Here are instructions on how to switch brokers and move your investments .)» MORE: How and when to switch financial advisors
» MORE: » MORE: How and when to switch financial advisorsWhat if you have a Roth and a traditional IRA at one brokerage?
What if you have a Roth and a traditional IRA at one brokerage?If you have a Roth IRA and a traditional IRA at the same institution, SIPC protection treats them as separately insured accounts and provides a total of up to $1 million in protection, or $500,000 on the Roth account and $500,000 for the regular IRA.
If you have a Roth IRA and a traditional IRA at the same institution, SIPC protection treats them as separately insured accounts and provides a total of up to $1 million in protection, or $500,000 on the Roth account and $500,000 for the regular IRA.What happens if your brokerage goes out of business?
What happens if your brokerage goes out of business?If your brokerage shuts down or becomes insolvent, other layers of protection shield you from loss before the SIPC needs to step in. As FINRA points out: “In virtually all cases, customer assets are safe and typically are transferred in an orderly fashion to another registered brokerage firm.”
If your brokerage shuts down or becomes insolvent, other layers of protection shield you from loss before the SIPC needs to step in. As FINRA points out: “In virtually all cases, customer assets are safe and typically are transferred in an orderly fashion to another registered brokerage firm.” FINRA.org. If a Brokerage Firm Closes Its Doors. Accessed Aug 25, 2025.Those other layers of protection include regulatory requirements for brokerage firms to keep customer assets segregated in separate accounts from the firm’s own money and to have a minimum amount of liquid assets on hand, kind of like an emergency fund for a broker.
Those other layers of protection include regulatory requirements for brokerage firms to keep customer assets segregated in separate accounts from the firm’s own money and to have a minimum amount of liquid assets on hand, kind of like an emergency fund for a broker.If against all odds your broker gets to the liquidation phase before you get your money back, you’ll be notified by a court-appointed trustee for the liquidation on how to file a claim. (As a backup you can always go to sipc.org to request a claim form.)
If against all odds your broker gets to the liquidation phase before you get your money back, you’ll be notified by a court-appointed trustee for the liquidation on how to file a claim. (As a backup you can always go to sipc.org to request a claim form.)The amount of your claim will be the value of the cash and securities in your account minus any debt you owe the brokerage firm (any margin loans, for example) on the date the SIPC files the court application for liquidation.
The amount of your claim will be the value of the cash and securities in your account minus any debt you owe the brokerage firm (any margin loans, for example) on the date the SIPC files the court application for liquidation.» MORE: Do you need a financial advisor? Take our quiz
» MORE: » MORE: Do you need a financial advisor? Take our quizON THIS PAGE
SIPC insurance rules SIPC insurance rules What SIPC covers What SIPC covers What SIPC insurance doesn’t cover What SIPC insurance doesn’t cover SIPC vs. FDIC: What is and isn’t covered Is it safe to have more than $500,000 in a brokerage account? Is it safe to have more than $500,000 in a brokerage account? What if you have a Roth and a traditional IRA at one brokerage? What if you have a Roth and a traditional IRA at one brokerage? What happens if your brokerage goes out of business? What happens if your brokerage goes out of business?ON THIS PAGE
SIPC insurance rules SIPC insurance rules What SIPC covers What SIPC covers What SIPC insurance doesn’t cover What SIPC insurance doesn’t cover SIPC vs. FDIC: What is and isn’t covered Is it safe to have more than $500,000 in a brokerage account? Is it safe to have more than $500,000 in a brokerage account? What if you have a Roth and a traditional IRA at one brokerage? What if you have a Roth and a traditional IRA at one brokerage? What happens if your brokerage goes out of business? What happens if your brokerage goes out of business? More like this NerdWallet’s Top-Rated Investing Products Investment Basics NerdWallet’s Top-Rated Investing Products Investing Investment Account Reviews How Much Does a Financial Advisor Cost? Most financial advisors charge based on how much money they manage for you. Fees are typically 1% a year but can be lower. 2 By Andrea Coombes, Taryn Phaneuf Do You Need a Financial Advisor? 7 Ways to Tell You may need a financial advisor if you're facing big life changes, don't have financial goals, have complex compensation, high tax bills or for other reasons. Taryn Phaneuf How to Find Cheap or Free Financial Advice Quality financial advice is more accessible than ever — and much of it is free or inexpensive. Here's how to get it. June Sham 3 Steps to Prepare for Your First Financial Advisor Meeting Here's what think about and bring to your first meeting with a financial advisor. June Sham