does fdic cover stocks? Quick Guide

Does FDIC Cover Stocks?

Introduction

Does fdic cover stocks? Short answer: no. This article explains why FDIC deposit insurance does not extend to equity investments and other marketable securities, how different protections (like SIPC and private insurance) work, and practical steps investors can take to reduce custodial and counterparty risks. Read on to learn what FDIC does cover, what it does not, and how to check the protections that apply to your brokerage or bank sweep arrangements.

Overview

The direct answer to "does fdic cover stocks" is straightforward: FDIC deposit insurance does not cover stocks, bonds, mutual funds, ETFs, annuities, or crypto assets. FDIC insurance protects deposit accounts held at FDIC‑insured banks up to applicable limits. Investment products carry market risk and are not insured by the FDIC.

As of January 22, 2026, according to FDIC guidance, the standard insurance limit is $250,000 per depositor, per insured bank, per ownership category. This insurance applies to account types such as checking and savings, certain money market deposit accounts, and certificates of deposit (CDs). It does not apply to marketable securities or investment products held at a broker, even if the broker places client cash into a sweep account at an insured bank—protections depend on how the cash is held and registered.

This guide will:

• Reiterate the scope of FDIC protection.
• Identify financial products that are not FDIC‑insured.
• Explain SIPC and other protections when a broker fails.
• Describe custody mechanics and what that means for recovery.
• Give practical steps and common scenarios to help you evaluate risks.

What the FDIC Is and What It Covers

The Federal Deposit Insurance Corporation (FDIC) is a U.S. government agency that protects depositors against loss if an FDIC‑insured bank fails. The FDIC's mission is to maintain public confidence and stability in the nation’s financial system.

Key points about FDIC coverage:

• Standard insurance limit: The FDIC insures deposits up to $250,000 per depositor, per insured bank, per ownership category. This limit has been in place since 2008 and applies to most deposit accounts.
• Covered products: Typical deposit accounts insured by the FDIC include:
  • Checking accounts.
  • Savings accounts.
  • Money market deposit accounts (bank‑issued).
  • Certificates of deposit (CDs).
• Ownership categories: The $250,000 limit applies by ownership category. Different categories (individual accounts, joint accounts, certain retirement accounts) have separate insurance limits.
• How insurance is applied: FDIC insurance is applied at the bank level, not at the account level across multiple banks, unless funds are held at different FDIC‑insured banks.

As of January 22, 2026, according to FDIC materials, these rules remain central to how deposit insurance functions. Knowing whether an account is held at an FDIC‑insured institution and how it is titled is essential to understanding coverage.

Financial Products Not Insured by the FDIC

FDIC insurance is narrowly tailored to protect depositors from the loss of deposits in the event a bank fails. The FDIC explicitly lists several financial products that are not insured.

Products not insured by FDIC include, but are not limited to:

• Stocks.
• Bonds.
• Mutual funds.
• Exchange‑traded funds (ETFs).
• Annuities.
• Life insurance policies.
• Municipal securities and other investment products.
• Cryptocurrencies and crypto assets.

Why these products are not insured: Investment products have market risk. Their value can fluctuate up or down based on market conditions, issuer performance, and broader economic factors. FDIC insurance is not designed to guarantee investment returns or prevent market losses. Therefore, when asking "does fdic cover stocks," the correct interpretation is that stocks are not deposit products and are not part of the FDIC mandate.

The FDIC publishes guidance listing "financial products that are not insured by the FDIC." Investors should consult those resources or their account documentation to determine insurance status for a specific product or arrangement.

Stocks, ETFs and Mutual Funds

Stocks represent equity ownership in a company. ETFs and mutual funds pool assets across many securities. When you hold these investments, you bear market risk: prices can decline and principal can be lost.

FDIC insurance does not protect against market losses or poor investment performance. If a company stock you own drops in value, neither the FDIC nor SIPC will reimburse you for the decline in value. When considering whether "does fdic cover stocks" the answer remains no, because FDIC's remit is bank deposits, not market exposures.

If a Broker or Broker‑Dealer Fails — SIPC and Other Protections

When a brokerage or broker‑dealer fails, investor protection may come from a different source: the Securities Investor Protection Corporation (SIPC) or private insurance maintained by the brokerage. SIPC is not a government agency but a congressionally created nonprofit membership organization funded by member brokerages.

Key facts about SIPC:

• Coverage: SIPC protection typically covers missing cash and securities held by a SIPC‑member brokerage up to $500,000 per customer, including a $250,000 limit for cash claims. This coverage is for customer property that is missing following brokerage failure, not for declines in market value.
• Purpose: SIPC helps return missing securities and cash when a brokerage fails and customer assets cannot be located. It steps in when a broker's records and assets are incomplete or misappropriated.
• Not a market‑loss insurer: SIPC does not protect against market losses. If stock prices fall while you own them, SIPC does not reimburse the loss.
• Scope: SIPC coverage attaches to customer property held by SIPC members. It does not apply to assets held directly with an issuer or held at entities that are not SIPC members.

Differences between FDIC and SIPC:

• FDIC insures deposits at banks against bank failure up to set limits; SIPC protects customers of brokerages when customer property is missing after a brokerage failure.
• FDIC protection is backed by the full faith and credit of the U.S. government for insured deposits. SIPC is a private corporation backed by assessments on member broker‑dealers and, in extraordinary circumstances, may access a line of credit with the U.S. Treasury.
• FDIC covers deposit accounts (no market exposure). SIPC focuses on misplaced or missing securities and cash but not on market losses.

As of January 22, 2026, the SIPC limits and purpose remain an important complement to FDIC coverage for investors who use brokerages for securities trading and custody.

How Stocks Are Custodied and What That Means for Protection

Understanding how brokerage custody works helps explain what happens if a broker fails or if assets are mishandled.

Custody basics:

• Street name holdings: Most brokerages hold securities in "street name" on behalf of clients. That means the brokerage's name appears on the issuer's books while the brokerage maintains records showing which customers own which securities. This arrangement simplifies settlement and transfer.
• Registered ownership: Some investors can choose to register securities directly in their name with the issuer or a transfer agent. Direct registration removes one layer of broker custody risk but can make trading less convenient.
• Broker‑custodian responsibilities: Brokers are required to keep customer property segregated from the firm's own assets. If a broker misappropriates customer assets or fails to maintain proper records, SIPC and the bankruptcy estate’s trustees may step in to recover missing property for customers.

Two separate risks exist:

1. Market risk: The value of securities can decline. This risk is borne by the investor. Neither FDIC nor SIPC covers market losses.
2. Custodial or counterparty risk: If a broker or custodian misuses or loses custody assets, customers risk losing access to their securities. SIPC and private insurance can help restore missing property in many cases.

If a broker fails and customer assets are missing, SIPC will evaluate claims and may transfer customer accounts, replace missing securities, or provide cash to cover shortfalls, subject to limits. Many brokerages also purchase private insurance beyond SIPC limits to increase protection for clients. Investors should review account agreements and disclosures to know what additional insurance exists.

Keep documents: Account statements, trade confirmations, and tax forms are essential if recovery is needed. These records help prove ownership and accelerate the process with SIPC, trustees, or the brokerage’s liquidator.

Other Relevant Protections and Exceptions

A few other protections and special cases are important for investors to know:

• Cash sweep and bank deposits: Some brokerages offer "cash sweep" programs that move uninvested cash into deposit accounts at FDIC‑insured banks. When sweep deposits are placed at FDIC‑insured banks and properly registered, they may receive FDIC coverage up to the applicable limits. Whether your sweep is FDIC‑insured depends on the destination bank and how the funds are held. Check your broker’s disclosures.
• U.S. Treasury securities: Treasury securities are backed by the full faith and credit of the U.S. government. While these are not FDIC‑insured in the same way as bank deposits, they are generally regarded as having minimal credit risk because they are obligations of the U.S. government.
• Bank‑issued investment products: Banks may sell investment products such as mutual funds or annuities. These products remain investments and are not FDIC‑insured even if purchased at a bank.
• Private insurance: Some brokerages maintain private insurance policies or excess SIPC coverage. These policies can provide additional protection above SIPC limits but are governed by policy terms.

When evaluating the question "does fdic cover stocks," remember that certain "cash equivalent" arrangements may have FDIC protection, while the securities themselves generally do not.

Practical Steps for Investors

To reduce custodial and counterparty risk and to know what protections apply, consider these practical steps:

1. Confirm FDIC and SIPC status
   • Ask whether your cash sweep is placed at FDIC‑insured banks and whether it is registered to your name or pooled. Confirm whether your brokerage is a SIPC member. Both checks help clarify where protections apply.
2. Review account agreements and disclosures
   • Read the broker/dealer or bank disclosures that explain sweep arrangements, custody practices, and insurance. Disclosures will state if sweep deposits are FDIC‑insured and how SIPC protection applies.
3. Keep records
   • Save account statements, trade confirmations, and tax documents. These records are essential if you need to prove ownership for recovery.
4. Understand custody statements
   • Brokerage statements typically separate cash (which might be swept to banks) and investment holdings. Knowing this distinction helps determine whether funds are covered by FDIC, SIPC, or neither.
5. Diversify counterparty exposure
   • Consider spreading cash sweeps across multiple banks or using brokerage programs that provide multi‑bank sweep options for broader FDIC coverage. This is different from diversification of investments; it’s about reducing concentration risk with counterparties.
6. Verify SIPC membership
   • Confirm your brokerage’s SIPC membership. Membership indicates that customers may access SIPC protection if the brokerage fails and customer property is missing.
7. Know who holds your assets
   • Ask whether securities are held in street name, in a omnibus account, or are directly registered. Direct registration can reduce certain custody chain risks but may limit trading convenience.
8. Consider custody alternatives
   • For long‑term holdings, consider whether direct registration or using multiple custodians better suits your goals.
9. Use secure wallets for crypto
   • For crypto assets, understand that neither FDIC nor SIPC covers native crypto. Use secure custody solutions and follow best security practices. If you use custodial services, verify their insurance and security disclosures.

When deciding where to trade or hold investments, weigh convenience, costs, and the custodial protection each provider offers. For users seeking trading and custody services, Bitget offers margin, spot trading, and Bitget Wallet options; review Bitget’s custody and insurance disclosures to understand protections available for crypto and other services.

Common Scenarios (Examples)

1. Bank failure — insured deposits returned by FDIC

   • Scenario: A depositor has $200,000 in a savings account at an FDIC‑insured bank that fails.
   • Outcome: FDIC insures the $200,000 and will return insured funds to the depositor, up to the $250,000 limit for that ownership category.

2. Broker failure and missing securities — SIPC may restore

   • Scenario: A SIPC‑member brokerage fails and customer securities are missing from the firm’s custody records.
   • Outcome: SIPC steps in to return missing securities and cash up to $500,000 per customer (including $250,000 for cash). If a shortfall remains, the bankruptcy trustee and private insurance policies may affect recovery.

3. Stock price decline — neither FDIC nor SIPC reimburse market losses

   • Scenario: An investor buys a stock for $10,000 and the share price falls to $6,000.
   • Outcome: This is a market loss. FDIC and SIPC do not reimburse declines in investment value. The investor bears the loss unless other contractual protections apply (rare).

These examples highlight the difference between deposit insurance for bank failures and custodial protections for brokerage failures.

Frequently Asked Questions

Q: Does FDIC insure my brokerage account? A: No. FDIC insures deposits at FDIC‑insured banks. Brokerage accounts that hold securities are generally not FDIC‑insured. Some uninvested cash in a brokerage account may be swept into FDIC‑insured bank accounts—check your broker’s sweep disclosures.

Q: Does SIPC protect against investment losses? A: No. SIPC helps recover missing cash and securities when a SIPC‑member brokerage fails. It does not insure against declines in market value or bad investment performance.

Q: If my broker sweeps cash to a bank, does that cash get FDIC protection? A: It can, but only if the sweep places funds into FDIC‑insured accounts and registration is correct. Coverage depends on the destination bank, the ownership registration, and FDIC limits.

Q: Are U.S. Treasury securities FDIC‑insured? A: Treasury securities are obligations of the U.S. government. They are not FDIC‑insured but are generally considered to have minimal credit risk due to government backing.

Q: What should I do if my broker fails? A: Keep records, confirm SIPC membership, file claims as directed by the broker’s bankruptcy trustee or SIPC, and follow official communications. Contact SIPC for guidance on the claims process.

Q: Does fdic cover stocks held in a bank trust account? A: No. Stocks held in a trust account remain investments and are not FDIC‑insured simply because they are held in a trust account at a bank. FDIC coverage applies to deposit products, not investment securities.

See Also

• FDIC deposit insurance basics and FAQs (consult FDIC resources for details)
• SIPC coverage and customer protection summaries
• Brokerage custody and asset segregation practices
• U.S. Treasury securities and credit backing

References

• FDIC — Deposit Insurance (official FDIC materials and guidance). As of January 22, 2026, according to FDIC public information, the standard deposit insurance limit remains $250,000 per depositor, per insured bank, per ownership category.
• FDIC — Deposit Insurance FAQs (official FDIC FAQs explaining coverage and ownership categories).
• FDIC — Financial Products That Are Not Insured by the FDIC (FDIC guidance listing stocks, bonds, mutual funds, annuities, and crypto as non‑deposit products).
• Schwab MoneyWise — Understanding FDIC and SIPC Insurance (educational summary of differences between FDIC and SIPC protections).
• SIPC — Investor protection and coverage descriptions (SIPC materials explaining coverage limits and purpose).

Further practical notes: As of January 22, 2026, FDIC and SIPC remain the primary frameworks used by regulators and market participants to explain depositor and investor protections. For up‑to‑date, account‑specific details, review your bank or broker disclosures and the applicable regulatory guidance.

Next steps and resources

If you're evaluating where to hold cash or securities, verify whether your broker is a SIPC member and whether any uninvested cash is swept into FDIC‑insured accounts. Keep account records and understand the ownership registration for each holding.

To explore trading platforms and custody options that prioritize security and clear disclosures, consider reviewing Bitget’s trading and Bitget Wallet features. Bitget provides custody solutions and educational resources to help you understand where protections apply for different assets.

Further exploration: Learn more about deposit insurance limits, SIPC rules, and custody mechanics by reviewing official agency materials and your account agreements. If you have specific questions about coverage for your holdings, contact your bank, broker, or the relevant regulator for authoritative, account‑specific guidance.

More practical suggestions

• Regularly reconcile your account statements against trade confirmations.
• Maintain a small emergency cash reserve in FDIC‑insured deposit accounts if you need immediate access without market risk.
• For long‑term investment holdings, focus on diversification and documented custody arrangements rather than relying on insurance to protect against market volatility.

As you make custody and platform choices, remember: the answer to "does fdic cover stocks" is no. FDIC protects qualifying bank deposits; other protections such as SIPC or private insurance may apply to securities custody, but they do not insure against market losses. Knowing which protections apply helps you manage risk and protect your assets appropriately.

Call to action

Want clear custody and protection information tied to a trading or wallet solution? Explore Bitget’s product pages and Bitget Wallet documentation to learn how custody, sweep arrangements, and insurance disclosures are handled. Review account agreements before opening an account to confirm the protections that apply to your deposits and investments.