Fidelity’s FDIC coverage
Say you have 500K in fidelity, 250K are invested in stocks and the other 250K is cash (SPAXX). If, hypothetically, fidelity goes bankrupt, does FDIC cover only cash position 250K or does it cover stocks too?
Look at the account. Is it FDIC insured? Yes? No? If it isn't yes, then you better hope the federal reserve or the US gov decides to bail them all out.
Balances in a Fidelity cash account are swept into an insured account subject to the $250K limitation. Your brokerage assets are never insured at Fidelity or anywhere else
The Securities Investor Protection Corporation (SIPC) is a nonprofit membership corporation that protects customers of SIPC-member broker-dealers if those firms were to fail financially. SIPC protects brokerage accounts of each customer up to $500,000, including up to $250,000 for cash
Thank you, lots of wrong answers in this thread
The only thing to keep in mind is that SPIC only insures the security… not its value… and it can take months and months for these kinds of things to settle. If Fidelity went bankrupt, the equity market is FUCKED. Fucked like really bad. The market would crash hard and there wouldn’t be any way for you to exit your position. Hedge funds would jump on it and short the shit out of everything. The day you finally got your shit back, there’d be even more selling while people liquidate and decide what to do. It would be really bad. As bad or probably worse than 2008. Congress would likely step in and prop everything back up and maybe give people back their money since it’s most people’s retirement.
Learn the diff between SIPC and FDIC. Depends on what account you have with Fidelity. ChatGPT is a thing.
Investments are something you own they don’t fall under fdic rules