Your 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.
Wealthfront prepared this article for informational purposes and not as an offer, recommendation, or solicitation to buy or sell any security. Wealthfront and its affiliates may rely on information from various sources we believe to be reliable (including clients and other third parties), but cannot guarantee its accuracy or completeness. See our Full Disclosure for more important information.
Wealthfront and its affiliates do not provide tax advice and investors are encouraged to consult with their personal tax advisor. Financial advisory and planning services are only provided to investors who become clients by way of a written agreement. All investing involves risk, including the possible loss of money you invest. Past performance does not guarantee future performance.