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What is SIPC Insurance?
Your investment account(s) is insured by the Securities Investor Protection Corporation (SIPC) up to $500,000 in total value per entity, but limits insurance on cash to $250,000 per entity. As with all securities firms, this coverage provides protection against failure of a broker-dealer, not against loss of market value of securities. Money market funds are considered a security. Cash is defined as funds not invested in a money market fund. Please see below for two examples of how SIPC insurance works.
- An individual account with $450,000 in securities and $10,000 in cash. SIPC insurance fully covers both the value of the securities, as well as all of the cash.
- Two accounts in the same name, each with $50,000 in securities and $200,000 in cash. The total value of securities is $100,000 and the total value of cash is $400,000. SIPC insurance covers the entire equity balance of both accounts of $100,000, but only $250,000 of the cash balance. $150,000 in cash would not be covered by SIPC in this scenario.
Please visit sipc.org for more information.
The Wealthfront cash account is protected with FDIC Insurance. Learn more here.
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