Depositor Insurance; FDIC and SIPC- They're the Same Right?

Depositor Insurance; FDIC and SIPC- They're the Same Right?

Kinda and kinda not. FDIC is the Federal Deposit Insurance Corporation. An agency of the federal government. SIPC is the Securities Investor Protection Corporation. A non-profit, non-government, corporation funded by the securities firms who belong to the SIPC organization. Both provide insurance protection over a depositor’s money but that protection is not all-inclusive.


With a FDIC insured bank or savings institution, a customer’s money is insured safe. With FDIC, the U.S. government protects depositors’ money in banks by insuring your deposits with the bank. FDIC insurance covers your checking accounts, savings accounts, money market deposit accounts and certificates of deposit and a few other accounts. If the bank fails, your money would be at risk without FDIC.


FDIC insurance does not cover other financial products and services that banks or savings associations may offer such as stocks, bonds, mutual funds, life insurance policies, annuities or other securities. These products and services are not typically held at the bank or savings institution. These investments and products tend to reside outside the bank or savings association.


The standard insurance amount is $250,000 per depositor, per insured bank. All accounts at one bank for the same owner are typically added together. There are a few exceptions as always. Learn more at


The SIPC protects customers of SIPC-insured brokerage firms facing financial difficulties. The SIPC coverage insures your cash and securities being held by your broker. It’s important to understand the coverage details.


The coverage amount for securities is up to a maximum of $500,000 which includes a coverage limit on the amount of cash at $250,000. The coverage limits are effective when the SIPC trustee is appointed to oversee the liquidation of the brokerage and process customer claims. This may be months after the brokerage becomes insolvent.


The market value of your securities is not covered but the amount of securities you own is. Say you own 100 shares of ‘ACME Coyote’ stock. The SIPC trustee will see that your 100 shares are returned to you. However, if the 100 shares of stock are not available, then you will be insured for the value of the 100 shares at the time the SIPC trustee was appointed—up or down.


SIPC covers most forms of securities like stocks, bonds, mutual funds; generally any registered securities. It does not cover unregistered securities or limited partnerships, annuity contracts, futures, or precious metals, to name a few. Learn more at