Fidelity FDIC insured

Is Fidelity FDIC or SIPC Insured?


Is Fidelity FDIC protected? For how much Fidelity brokerage and IRA accounts' cash, investments, and deposits have SIPC insurance coverage?


Is Fidelity FDIC Insured and SIPC Protected?


If you’re worried whether your hard earned savings and investments are protected, rest assured that Fidelity does a good job in safeguarding your account. Fidelity provides both FDIC (the Federal Deposit Insurance Corporation) and SIPC (Securities Investor Protection Corporation) insurance and will help protect stolen and missing funds. These also safeguard your assets if the firm goes bankrupt. Your account will automatically be enrolled in their Customer Protection Guarantee safeguards you from illegitimate withdrawals or theft from your cash management and brokerage/retirement accounts.

Fidelity provides both FDIC and SIPC insurance. The basic difference between the two organizations is that the FDIC deals mostly with your checking and saving bank account, whereas the SIPC deals with your investments through brokerage and retirement accounts. The FDIC is also an independent federal agency, whereas the SIPC is a nonprofit organization based on membership.


Fidelity FDIC Insurance


Fidelity provides FDIC insurance for certain types of deposit accounts. These include various IRAs offered through them (traditional, Roth and rollover IRA, etc.), cash management accounts, and Fidelity’s Health Savings Account.

FDIC generally protects up to $250,000 per account, and if you have on deposit more than that amount, then Fidelity will send you a notification reminding you of the max amount covered.


Is Fidelity FDIC Insured?


Fidelity SIPC Insurance


Fidelity is also one of the major brokers that is protected under SIPC as well. The SIPC is designed to safeguard investment brokerage accounts and protects stocks, bonds, ETFS, etc. If an investment bank like Fidelity goes bankrupt, it can cover up to $500,000 total for all of the accounts you have under Fidelity. This includes over $250k in cash held in the brokerage account as well. This includes both principal and accrued interest that grows over time. There is also an “excess of SIPC” coverage that covers up $1.9 million in coverage, but make sure to check with Fidelity about the additional coverage.


Fidelity And Top Competitors


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Offer
Stock/ETF
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Mutual Fund
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Maintenance
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Annual IRA
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WeBull 12 FREE stocks valued $34-$30,600 give-away at Webull. $0 na $0 $0
Ally Invest Up to $3,000 cash bonus + $0 commission trades. $0 $9.95 $0 $0
TD Ameritrade $0 commissions + transfer fee reimbursement. $0 $49.99 ($0 to sell) $0 $0
Fidelity Get $0 stock commissions. $0 $49.95 $0 $0


Good Track Record


Both the FDIC and SIPC have a great track record of protecting money and assets throughout their history. The FDIC was created in 1933 and has over and has been effective insuring banks. The SIPC has a good track record as well, registering over 50 years in safeguarding member banks. They both have upheld their promise for protection despite many market downturns and recessions along the way.


Drawbacks


Although it’s great that they provide FDIC and SIPC insurance, its important to note a few restrictions to the protection they provide. First off, Fidelity requires that you contact them immediately within 30 days if you notice any abnormal withdrawals or activity on your account. They also have a user agreement that states this when opening an account through them. It’s important to make sure to check you statements frequently and immediately call Fidelity if you notice suspicious activity.

It’s also important to note that activities made by your investment advisor for you are not covered through these types of insurance. So make sure you have full trust in your investment advisor and know about all the of trades being placed within your accounts.


Other Fidelity Insurance


Not only does Fidelity provide FDIC and SPIC insurance for their cash management and investment/retirement accounts, they also provide a host of other types of insurance. Other types of insurance offered by Fidelity are Life, Health, Disability, Umbrella, and Long-term Insurance. To see a brief description of these types of insurance, click here.


Overall an Industry-leader in Protecting Assets


Among the major investment banks, Fidelity does a good job of insuring both of your cash management and deposit accounts through the FDIC, and your investments through SPIC protection. It also offers other various insurance plans and retirement account protection so that once can feel safe trusting their money with them.


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Updated on 6/14/2022.


About the Author
Arthur Chachuna is professional personal finance blogger, and the owner of Brokerage-Review.com. He has been an avid investor for 23 years, and has background in both applied math and programming.