Investing guide
SIPC vs FDIC: what protects your money
FDIC insures bank deposits; SIPC protects customers if a brokerage firm fails — neither protects against investment losses.
Sourced from official pages · Updated September 30, 2026📈
Investing5 sections
4 official sources linked💡 Key takeaways
- FDIC insures deposits up to $250,000 per depositor, per insured bank, per ownership category.
- SIPC protects cash and securities at a member brokerage if the firm fails, up to $500,000 including a $250,000 limit for cash.
- Neither protects against a decline in the value of your investments.
- Money market funds are not FDIC-insured and can lose money; bank money market deposit accounts are FDIC-insured.
Comparing the protections
| FDIC (banks) | SIPC (brokerages) | |
|---|---|---|
| Protects | Deposits — checking, savings, money market deposit accounts and CDs — if an insured bank fails | Cash and securities held at a member brokerage firm if the firm fails or has missing customer assets |
| Limit | $250,000 per depositor, per insured bank, per ownership category | Up to $500,000, including a $250,000 limit for cash |
| Does not protect | — | Against a decline in the value of your investments |
Good to know
- SIPC only protects customers of SIPC-member firms.
- If a brokerage “sweeps” uninvested cash into a bank program, that cash is held at the bank and may be FDIC-insured within limits rather than protected by SIPC.
- Money market deposit accounts at banks are FDIC-insured; money invested in a money market fund, like any mutual fund, is not guaranteed by the FDIC and you can lose money.
Checking your coverage
- Confirm your bank is FDIC-insured (or your credit union NCUA-insured).
- Confirm your brokerage is a SIPC member.
- Check where any swept cash is held.
- Keep balances within the limits or spread across ownership categories.
🔗 Related
See FDIC and NCUA insurance for more on deposits and the savings and CD rates page for rates.
🔤 Key terms
| Term | Meaning |
|---|---|
| FDIC | Insures deposits at banks |
| NCUA | Insures deposits at credit unions |
| SIPC | Protects customers if a brokerage fails |
| Sweep program | Moves brokerage cash into a bank program |
⚠️ Common mistakes to avoid
- Assuming SIPC protects against market losses.
- Not checking whether swept cash is at a bank.
- Assuming all products at a bank are FDIC-insured — investments are not.
- Exceeding limits without spreading across banks or categories.
🛠️ Try it yourself
❓ Frequently asked questions
Is my brokerage cash insured?
It depends on how the cash is held; check with the firm.
Does SIPC protect stocks that fall?
No.
Are money market funds insured?
No, not by FDIC; they can lose money.
Is crypto covered?
SIPC and FDIC do not cover market losses; check current rules for specific assets.
📚 Sources
This guide is general information, not financial, tax or legal advice. Rules and limits change; confirm with the sources above or a licensed professional.