What is FDIC vs. SIPC Insurance?

FDIC vs. SIPC: What Each Protects

Consumers frequently confuse FDIC and SIPC protection, yet they cover completely different financial assets:

1. FDIC (Federal Deposit Insurance Corporation)

• What It Covers: Cash deposits in checking accounts, High-Yield Savings Accounts (HYSAs), Money Market Deposit Accounts (MMDAs), and Certificates of Deposit (CDs) at member banks.
• Standard Limit: $250,000 per depositor, per insured bank, per ownership category ($500,000 for joint accounts). Fintech FDIC sweep networks (like Wealthfront Cash or Fidelity Cash Management) distribute cash across 8 to 20+ partner banks to expand coverage up to $2M–$8M.

2. SIPC (Securities Investor Protection Corporation)

• What It Covers: Custodial failure or missing stocks, ETFs, bonds, Treasury bills, and money market mutual funds (such as SPAXX or VMFXX) if a registered brokerage firm goes bankrupt.
• Standard Limit: $500,000 total per customer capacity, including up to $250,000 for uninvested cash awaiting investment. SIPC does not protect against market decline in the price of your stocks.