Looks like market accounts (SPAXX) for fidelity are covered by SIPC(securities investor protection corporation). The cash limit is $250,000. This is same as FDIC. So is it safe to have cash lower than $250k in money market accounts in fidelity? How exactly is SIPC different from FDIC? #personalfinance #fidelityinvestments #fdic
What about cash sitting in my investment account? It it insured too?
Yeah the cash in there is insured up to $250k
Can anyone knowledgeable opine on this. Is it just cash? Or investments? Assume a run happens and you have $1M invested and 300k cash. Does SIPC only insure 250k or are the assets insured? Feels like If the assets are gone the number of shares floating around changes so the stock price would have to go up. It would make sense if the assets were insured and given to the owner via some other brokerage.
Imagine being paranoid Fidelity MMF breaking the buck. Fidelity even in financial crisis had zero issues. Company manages 10+ trillion in assets. Chance of it falling is even lower than JPM falling. Fidelity and Vanguard runs North America's retirement. If either of those two have issues, you should have been investing in guns/water/canned food instead.
Feels like short sighted thinking. Lehman did fail as did Enron. Nothing is impossible. Things may turn out as you say - but being educated and learning doesn’t hurt.
Vanguard objectively cannot fail. The funds are owned by the investors and the funds own the company. If the funds fail, that means the entire economy has collapsed and your dollars would be worthless anyway.
SIPC is nothing like FDIC. First it covers 500k instead of 250k. Second brokers arr supposed to hold your actually stock, not play with it like banks on deposits. If your broker goes underwater then your stock holds and gets transferred to a different provider. The insurance is there for very specific clearing issues like the broker going bankrupt mid transaction, or an error that would make your assets disappear
This is my limited understanding. It’s if they’re software fails for some reason and the trace of your assets can’t be found for some strange reason.
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SPIC is the investing equivalent of FDIC. FDIC insures up to $250k for retail cash deposits in a checking or savings account in the case of a retail “bank run”. SPIC insures up to $250k for brokerage accounts of stocks and bonds in the case of an investment bank having a “bank run”. If you have money less than $250k in your account the federal government guarantees you will get your money. Anything over that amount is by chance.
I have only cash less than $250k in money market account in fidelity. No stocks or bonds
Your SPIC claims are all wrong, do some reading