Updated
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 customer, which includes a $250,000 limit for cash. 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 investment 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 in the event of a broker-dealer failure.
- Two investment 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 investment accounts of $100,000 invested in securities, but only $250,000 of the cash balance. $150,000 in cash would not be covered by SIPC in this scenario in the event of a broker-dealer failure.
In addition to baseline SIPC coverage, Wealthfront also carries private excess SIPC insurance with an additional $500 million in aggregate and a maximum of $900,000 limit on cash per customer. It is important to note that excess SIPC insurance is insurance provided by a private insurer and not by SIPC. Please see below for two examples of how excess SIPC insurance works.
- An individual investment account with $450,000 in securities and $10,000 in cash. SIPC insurance fully covers both the value of the securities and all of the cash and excess SIPC insurance is not utilized.
- Two investment 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 balance of securities of both investment accounts of $100,000, but only $250,000 of the cash balance. Excess SIPC insurance would cover the remaining $150,000 in cash that is not covered by the standard SIPC insurance, up to our $500 million ($900,000 in cash) in total coverage in the event of a broker-dealer failure.
The excess insurance can help protect brokerage customers by covering losses, in the event of a broker-dealer failure, of cash and securities (up to excess insurance limits) in a Securities Investor Protection Act (SIPA) proceeding. Customers’ eligibility for insurance recovery is typically determined only after the SIPA liquidation process is finished and their recovery amount has been calculated.
Please visit sipc.org for more information.
The cash deposits in a Wealthfront Cash Account are protected with FDIC Insurance provided through our partner banks. Learn more here.
This information is accurate as of January 14th, 2024.
Nothing in this communication should be construed as investment or tax advice, or offer, or recommendation of any security or investment strategy. Any links provided to other server sites are offered as a matter of convenience and are not intended to imply that Wealthfront Corporation or its affiliates endorses, sponsors, promotes and/or is affiliated with the owners of or participants in those sites, or endorses any information contained on those sites, unless expressly stated otherwise.
Investment management and advisory services are provided by Wealthfront Advisers LLC (“Wealthfront Advisers”), an SEC-registered investment adviser. Investing involves risk, including possible monetary loss. Past performance does not guarantee future success. Securities investments are not bank deposits, are not bank guaranteed or FDIC-insured and may lose value.
The Cash Account is offered by Wealthfront Brokerage LLC (“Wealthfront Brokerage”), a Member of FINRA/SIPC and not a bank. Cash deposits in the Cash Account are swept to Participant Partner Banks where they earn a variable interest rate and are eligible for FDIC insurance. Conditions apply.
FDIC insurance is not provided until the cash deposits arrive at the participant banks. FDIC insurance coverage is limited to $250,000 per qualified customer account per banking institution. Wealthfront Brokerage uses more than one Participant Bank to ensure FDIC coverage of up to $8 million for cash deposits. For more information on FDIC insurance coverage, please visit www.FDIC.gov. Clients are responsible for monitoring their total assets at each of the participant banks to determine the extent of available FDIC insurance coverage in accordance with FDIC rules. While funds are at Wealthfront, before they are swept to the participant banks, they are subject to SIPC’s standard protection limit of $250,000 for cash. Wealthfront carries private excess SIPC insurance through a third-party with an additional $500 million in aggregate and a maximum of $900,000 limit on cash.
Wealthfront Advisers and Wealthfront Brokerage are wholly owned subsidiaries of Wealthfront Corporation.
© 2025 Wealthfront Corporation. All rights reserved.
Comments are moderated prior to publication