TD Ameritrade FDIC insured

Is TD Ameritrade FDIC or SIPC Insured?

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

Is TD Ameritrade FDIC Insured?

If you are like most investors, you want to make sure you are investing your money with a safe and trusted firm. One of the main factors in keeping your money safe is your brokerage firm’s insurance. We are going to analyze the insurance that TD Ameritrade offers.

Insurance that TD Ameritrade Gives Investors

There are four different types of insurance and protection that TD Ameritrade offers. They are SIPC, FDIC, supplemental coverage, and Asset Protection Guarantee. Each of these four types of coverage protects you in different ways and they each have their own regulations. It is extremely important to understand that none of these coverages protect you against the loss of value of your investments.

Is TD Ameritrade SIPC Insured?

TD Ameritrade is a member of the Securities Investor Protection Corporation (aka SIPC). SIPC insurance protects your securities and cash up to a total of $500,000, including a maximum of $250,000 of cash. SIPC specifically protects your money in the event of TD Ameritrade going out of business or going into bankruptcy. With the size and strength of TD Ameritrade’s business, it is tremendously unlikely that they would be going out of business anytime soon however, you never know what can happen in the future.

Let’s take a look at an example of exactly how SIPC insurance works. Let’s say you have a brokerage account with TD Ameritrade with a total value of $900,000, including $500,000 of stocks and $400,000 of cash. You hear on the news one morning that TD Ameritrade is filing for bankruptcy. The SIPC insurance would step in to make sure that $250,000 of your stocks and $250,000 of your cash would be protected for a total of $500,000.

But what about the other $400,000 in your account? Not to worry, TD Ameritrade offers supplemental insurance that would have you covered.

Open TD Ameritrade Account

Open TD Ameritrade Account

TD Ameritrade Supplemental Insurance

For the excess amount over $500,000 that SIPC doesn’t cover, TD Ameritrade offers supplemental insurance through London insurers for up to an additional $149.5 million of securities and $2 million of cash for each client. This may sound like a lot of coverage for each person but, this supplemental insurance policy only covers a total of $500 million for all of TD Ameritrade’s customers combined. So, depending on how TD Ameritrade would decide to sort everything out if they were to go into bankruptcy, you may or may not be fully covered above $500,000.

Is TD Ameritrade FDIC Insured?

You can have your cash FDIC insured with TD Ameritrade but, there is a specific step you need to take in order to do so. You must choose to have your cash held in TD Ameritrade’s FDIC Insured Deposit Account. This special type of cash account works by automatically sweeping your cash to one or more banks where you are eligible for FDIC insurance through the banks.

TD Ameritrade fdic insurance

TD Ameritrade has a specific list of banks that participate in this FDIC account with them. Each bank that your cash is held at offers the standard amount of $250,000 of FDIC insurance. Therefore, by having your cash held at multiple banks through TD Ameritrade’s FDIC Insured Deposit Account, it’s possible for you to have more than a total of $250,000 of FDIC insurance overall.

Asset Protection Guarantee

TD Ameritrade vows to reimburse you for any lost cash or securities due to unauthorized activity on your account. Basically, as long as you do everything in your power to keep your account safe and the loss is no fault of your own, TD Ameritrade will cover you through their Asset Protection Guarantee.

Open TD Ameritrade Account

Open TD Ameritrade Account

Is TD Ameritrade FDIC Insured Conclusion

TD Ameritrade goes above and beyond, compared to a lot of other brokerage firms, to make you feel that your assets are safe and protected with them. Even still, make sure to dig into the details of all the different types of insurance and coverage they offer so you can make an informed decision on where to keep your money safe.

Read TD Ameritrade Review »

Updated on 4/26/2022.

About the Author
Paul Johnson is a Licensed Stockbroker with 7+ years of experience in the financial services industry. Paul enjoys teaching about investing and writing about financial topics. He is a husband and father of twin boys.