are stock accounts insured?

Are stock accounts insured?

Short answer: when people ask "are stock accounts insured?" they usually mean whether brokerage accounts that hold stocks, cash, or related securities have insurance or statutory protections, and what those protections cover and do not cover. This article walks through the U.S. protections you should know (SIPC, FDIC/NCUA for swept deposits), how coverage limits work, custodial and segregation rules, private excess policies, special cases such as retirement accounts and digital assets, and practical steps investors can take to verify protection.

Note: this is informational content only. It is not investment advice.

Overview of protections for investor assets

When asking "are stock accounts insured?" it helps to separate three protection categories commonly relevant to U.S. investors:

• Deposit insurance (FDIC for banks, NCUA for credit unions) — protects bank deposits up to statutory limits when a bank or credit union fails.
• Investor protection (SIPC) — a congressionally created nonprofit that helps restore customer cash and securities if a SIPC-member broker-dealer fails and assets are missing.
• Custodial/segregation legal rules and private/excess insurance — regulatory custody rules and firm-bought private policies that can add protection above SIPC limits.

These systems work together, but they cover different risks. Neither FDIC/NCUA nor SIPC insures against market losses. Read on for the details you need to answer "are stock accounts insured?" for your accounts.

The Securities Investor Protection Corporation (SIPC)

SIPC is a non-governmental corporation created by Congress in 1970 to help protect investors if a member brokerage firm fails. SIPC steps in when a broker-dealer (that is a SIPC member) becomes insolvent and customer cash or securities are missing.

SIPC’s purpose is to restore customer property—either by returning missing securities and cash to customers, or by overseeing a transfer of customer accounts to a solvent broker. SIPC does not guarantee investment performance or protect against bad investment decisions.

SIPC coverage limits and scope

The standard SIPC protection is:

• Up to $500,000 per customer, including up to $250,000 for cash claims (this is a single combined limit for cash and securities in most cases).
• Coverage applies per “separate capacity” — for example, an individual account, a joint account, and an IRA are treated as separate capacities for SIPC limits in many situations (specific rules apply).

SIPC coverage is not unlimited. If your net equity at a failed broker exceeds SIPC limits and no private excess is available, recovery of amounts above the limits depends on the liquidation process and available estate assets.

What SIPC protects

SIPC protects most customer securities and cash held by a SIPC-member brokerage. Typical examples include:

• Stocks and bonds held in brokerage accounts.
• Mutual funds and exchange-traded funds (ETFs) when held as securities at the broker.
• Certificates of deposit (CDs) purchased through a broker (treated as securities in that context).
• Money market fund shares held as securities at the brokerage.

SIPC helps when those assets are missing from the brokerage’s records or when a firm’s insolvency threatens return of customer property.

What SIPC does not protect

SIPC does not cover:

• Market losses — declines in the value of your stocks, bonds, mutual funds, or ETFs.
• Fraud losses where the security itself was worthless because it was a bad investment (unless the security is missing from the firm’s custody and a customer loss arises from the firm’s failure to return it).
• Commodities and futures products not carried as securities by a SIPC member.
• Certain unregistered or non-security digital assets — treatment depends on whether the digital asset is legally a security and how it is held by the custodian.

In short: SIPC addresses missing customer property tied to a broker failure; it does not insure price performance.

FDIC / NCUA deposit insurance and brokerage cash sweeps

FDIC insurance protects bank deposit accounts if a bank fails, typically up to $250,000 per depositor, per insured bank, per ownership category. NCUA provides comparable coverage for federally insured credit unions.

Brokerage firms commonly offer "cash sweep" or "bank sweep" programs that move uninvested cash from brokerage accounts into one or more partner banks or money market accounts. How that cash is protected depends on the destination and the product:

• If sweep funds are placed in FDIC-insured bank deposit accounts at program banks, they are FDIC-insured up to $250,000 per depositor per bank (pass-through or omnibus arrangements have specific rules).
• If sweep funds are placed in money market mutual funds (a fund product), that is treated as a security and would be covered under SIPC if the fund shares go missing due to broker failure — but the fund itself carries market risk (its net asset value can fluctuate).

As of January 15, 2026, according to the FDIC and recent reporting, the national average money market account rate is 0.58%. Higher-yield offers from banks and credit unions are available above 4% APY at certain institutions, which makes it important to understand where your cash actually sits and whether it’s FDIC-insured or invested in a fund product.

How cash sweep and bank sweep programs work

Typical sweep program features:

• Uninvested cash in your brokerage account is automatically moved (swept) into a cash management vehicle overnight.
• Partner banks may hold deposits in separate accounts for customers (sometimes via "pass-through" insurance that credits FDIC coverage to individual customers) or a broker may keep money in money market funds.
• Coverage depends on whether the destination is a bank deposit (FDIC/NCUA insured) or a fund/security (SIPC rules may apply for custodian failure, but market risk remains).

If you are asking "are stock accounts insured?" also ask: is my uninvested cash swept into FDIC-insured bank deposits, or into a money market fund? The protections differ.

Custodial protections and segregation rules

Broker-dealers operating in the U.S. are subject to SEC rules and standards that require segregation of customer assets from firm assets. Key points:

• Brokers must keep customer cash and securities in custody and not use them for the broker’s own obligations.
• Clearing firms, depositories (for example, centralized securities depositories), and custodians hold securities on behalf of broker-dealers; this creates layers intended to protect customer assets in insolvency.
• If assets are properly segregated and fully present, a trustee or transferring broker can often return or move customer accounts without invoking SIPC insurance.

These regulatory custody rules are a critical part of answering "are stock accounts insured?" — they help prevent commingling of customer assets with broker assets, reducing the risk that a broker’s creditors can reach customer property.

Private / excess insurance and broker-specific protections

Many large brokerages purchase private excess-of-SIPC insurance to increase protection for customer assets above the $500,000 SIPC limit. Important considerations:

• Excess policies vary by firm: the amount covered, sub-limits per account type, and claim conditions differ across brokers.
• Excess insurance is a private contract with insurers; payouts depend on insurers’ terms and the firm’s solvency and claims process.
• Read your brokerage’s account agreement and protection disclosures to learn whether your broker has excess coverage and how it applies.

When you ask "are stock accounts insured?" remember that total protection for a customer may be SIPC + any private excess-of-SIPC insurance the firm carries. But private insurance is not the same as federal insurance and is subject to insurer contract terms.

Special cases: retirement accounts, multiple accounts, and joint ownership

SIPC treats accounts held in different legal capacities separately for coverage. Common examples:

• Individual accounts: one $500,000 SIPC limit.
• Joint accounts: treated separately from each owner’s individual accounts in many cases.
• Retirement accounts (IRAs): treated as a separate capacity, entitling them to separate SIPC limits in most situations.

However, aggregation rules can be complex. If you hold multiple account types at the same broker, the way SIPC aggregates net equities across accounts affects the amount of coverage available. If you have significant assets above SIPC limits, one practical approach is to spread accounts across multiple SIPC-member brokers or confirm excess insurance limits with your broker.

Digital assets / cryptocurrencies held by brokers or custodians

The handling of digital assets (crypto) introduces additional complexity when answering "are stock accounts insured?" because digital assets may not be classified as securities in every instance and custodial arrangements vary:

• SIPC guidance: SIPC’s protection applies to traditional securities and cash. Whether a digital asset (token) qualifies as a "security" for SIPC purposes depends on legal classification and case-by-case treatment.
• Custody model matters: if a broker or custodian holds tokens in customer-segregated wallets and the tokens are considered securities, SIPC may offer protection in a broker-failure scenario — but this is not guaranteed.
• Some custodians and brokers provide their own insurance programs or third-party policies for certain digital-asset theft or custody risks; the scope and limits vary.

If you are storing digital assets via a brokerage or custodian, check firm disclosures and ask explicitly whether the asset is treated as a security, whether SIPC coverage applies, and what private insurance or contractual protections exist. For self-custody, consider secure wallets (Bitget Wallet is an example of a custodial and non-custodial solution) and separate security best practices.

What happens if a broker fails — the claims process

A typical sequence when a broker-dealer fails:

1. Broker becomes insolvent or halted; customers may temporarily lose access to accounts.
2. A court-appointed trustee oversees the liquidation or transfer process.
3. SIPC evaluates the situation. If customer assets are missing, SIPC may advance funds to the trustee and work to transfer customer accounts to a solvent broker.
4. Customers may receive direct transfers of their accounts (preferred) or a pro rata distribution if assets are insufficient.
5. If assets are missing, customers file claims with the trustee. SIPC’s mission is to restore missing securities and cash up to coverage limits.

Timelines vary. In many modern failures, customer accounts are transferred to another broker and access is restored relatively quickly; when assets are missing and litigation or complex custody issues arise, resolution can take longer.

Common misconceptions

Clear answers to frequent misunderstandings when people ask "are stock accounts insured?":

1. SIPC or FDIC does not insure against investment losses. If your stock falls in value, insurance does not cover that loss.
2. SIPC is not federal deposit insurance like FDIC; it is a congressionally created nonprofit that protects customers of member brokers in certain failure scenarios.
3. Being a SIPC member does not make investments risk-free. Ownership risk, market risk, and counterparty risk can still affect you.

How to check your coverage and verify your broker

Steps to verify whether "are stock accounts insured?" applies to your accounts:

• Confirm SIPC membership: check the broker’s disclosures and SIPC membership statements in the account agreement. You can verify membership information at SIPC’s official materials (search "SIPC membership").
• Check FDIC/NCUA coverage if your broker uses bank sweep programs: verify whether your swept cash is placed in FDIC-insured bank accounts and whether coverage is pass-through to your account.
• Read your broker’s account agreement and protection summary for private excess-of-SIPC insurance details and sublimits.
• Keep regular account statements and trade confirmations as evidence in case you ever need to file a claim.

When in doubt, contact the broker’s customer service and request written confirmation of how your cash is swept, what protections apply, and whether the firm carries excess insurance.

Practical investor guidance and best practices

To answer and act on "are stock accounts insured?" consider these practical steps:

• Diversify custodians: if you hold assets above SIPC limits, spread assets across multiple SIPC-member brokers to increase total coverage capacity.
• Confirm sweep program details: if you have substantial uninvested cash, ask whether it is held in FDIC-insured bank deposits (and which banks) or placed into money market funds.
• Keep documentation: store account statements, confirmations, and the broker’s protection disclosures in a secure place.
• Check firm disclosures about private excess-of-SIPC insurance and know the insurer’s sublimits and terms.
• For digital assets, verify custody model and whether the asset is treated as a security. Consider using dedicated custody services and secure wallets (Bitget Wallet is an integrated option for Bitget users).
• Maintain clear records for separately titled accounts (individual, joint, IRA) to ensure you can claim separate capacities if needed.

Call to action: explore Bitget account protections and Bitget Wallet features to understand custody choices and protections available to Bitget users.

International considerations

If you are not a U.S. investor, protections differ. Many countries have deposit-insurance schemes and investor-compensation programs, but the structures, coverage limits, and administering organizations vary. Non-U.S. investors should consult local rules, broker disclosures, and national regulatory websites to answer the local equivalent of "are stock accounts insured?".

What the recent deposit-rate environment means for swept cash and MMAs

As of January 15, 2026, according to the FDIC and reporting by financial outlets, the national average money market account (MMA) rate is 0.58%, though many high-yield offers pay well over 4% APY. The Federal Reserve cut the federal funds rate three times in 2024 and again three times in 2025; lower policy rates have contributed to declining deposit rates.

Implications for brokerage cash handling:

• If your brokerage sweeps cash into FDIC-insured bank MMAs or savings accounts, the yield you receive depends on partner bank rates and program terms.
• If sweep programs use money market funds (a securities product), returns are driven by market yields for short-term instruments and are subject to market risk.
• Given rate declines, it is timely to check where your uninvested cash sits and whether you are receiving competitive yields on swept balances while ensuring appropriate insurance coverage.

Always verify program details with your broker and consider moving idle cash into higher-yield FDIC-insured deposit accounts if appropriate and consistent with your liquidity needs.

References and further reading

Principal authoritative sources and recommended pages to confirm details include:

• SIPC materials on what it protects and membership guidance (SIPC official resources).
• FDIC guidance on deposit insurance limits and coverage; FDIC data on average money market rates.
• Broker pages on SIPC and FDIC coverage and account protection summaries (for example, standard broker "account protection" pages).
• Consumer finance outlets (NerdWallet, Bankrate) and broker help pages that summarize SIPC vs FDIC differences.

(See the References section below for a labeled list of sources used in this article.)

Appendix — Quick FAQ

Are my stocks insured if my broker goes bankrupt?

Short answer: If your stocks are properly held as customer securities at a SIPC-member broker, SIPC (and any private excess insurance the broker carries) helps restore or transfer missing securities up to coverage limits. SIPC does not protect against market losses.

Is cash in my brokerage account FDIC insured?

Short answer: It depends. Cash held in bank deposits via a sweep program at FDIC-insured banks is FDIC-insured up to FDIC limits. Cash placed into money market funds is a security (market risk applies) and would be handled under brokerage custody/SIPC rules if missing.

Appendix — Example scenarios

Scenario 1: Broker insolvency with properly segregated securities

• Facts: A SIPC-member broker fails but all customer securities are present and properly segregated.
• Likely outcome: A trustee or SIPC arranges to transfer customer accounts to another broker; customers regain access to their holdings without a SIPC payout.

Scenario 2: Broker insolvency with missing cash and securities

• Facts: A broker fails and the trustee finds customer accounts short of certain securities or cash.
• Likely outcome: SIPC works with the trustee to restore missing customer property up to SIPC limits ($500,000 including up to $250,000 cash per customer capacity). Amounts above that may depend on private excess insurance or pro rata distributions.

Scenario 3: Uninvested cash swept to a bank that later fails

• Facts: Your brokerage sweeps cash to an FDIC-insured bank; that bank fails.
• Likely outcome: FDIC insurance applies to deposits up to $250,000 per depositor per insured bank (pass-through rules apply if the sweep is structured that way). If funds were in a money market fund instead, FDIC would not apply.

Common questions investors ask when they wonder "are stock accounts insured?"

• How can I tell whether my broker has excess-of-SIPC insurance? — Review account disclosures or ask the broker for written documentation.
• Do IRAs get separate SIPC protection? — Typically yes; IRAs are treated as a separate capacity for SIPC limits.
• Are crypto holdings covered by SIPC? — It depends on legal classification and custody; many digital assets are not automatically covered.

References

• SIPC — What SIPC Protects (SIPC official materials).
• Fidelity — What is SIPC coverage? (Broker help pages).
• Schwab MoneyWise — Understanding FDIC and SIPC Insurance (consumer guidance).
• Charles Schwab — Account Protection (broker protections summary).
• NerdWallet — SIPC Insurance: What It Is, What It Covers (consumer explanation).
• Bankrate — SIPC insurance: What it covers and how it protects investors (consumer reporting).
• Chase — Are Brokerage Accounts FDIC Insured? (bank consumer guidance).
• Experian — Are Brokerage Funds Insured? (consumer education).
• LendingClub — FDIC vs. SIPC: Where Is It Better to Hold Cash? (comparative guide).

Additional note on deposit-rate context: As of January 15, 2026, according to the FDIC and recent reporting, the national average money market account rate is 0.58%, while several high-yield money market account offers exceed 4% APY — underlining the importance of comparing sweep and deposit options for idle cash.

Final guidance — next steps for readers

If you’ve asked "are stock accounts insured?" and want to act:

• Verify your broker’s SIPC membership and read its account-protection disclosures.
• Confirm whether your uninvested cash is swept into FDIC-insured bank deposits or into money market funds; request written confirmation of sweep destinations.
• Keep statements and confirmations to document holdings and custody.
• Consider diversifying custody if you hold significant assets beyond SIPC limits, and check whether your broker has private excess-of-SIPC insurance.
• For crypto or token holdings, confirm custody model and protections; consider Bitget Wallet for custody options and security features.

Further reading and verification: consult SIPC materials, FDIC guidance, and your broker’s disclosures.