Insurance Superheroes - The Differences Between SIPC and FDIC
SIPC vs FDIC: Who's Got Your Back?
This week at NEST, we wanted to tackle a question we get often—what is the difference between SIPC and FDIC? So, buckle up. We’re about to dive into the exciting world of financial safeguards. These two government-backed organizations are like the superheroes of the financial world, but they’ve got different powers.
SIPC – Securities Investor Protection Corporation
Protects customers of member brokerage firms if the firm fails.
Covers securities such as stocks and bonds, and cash held at the brokerage for the purpose of purchasing securities.
Does not protect against losses from market fluctuations or poor investment choices.
Coverage: Up to $500,000 per customer, with a $250,000 limit for cash claims.
FDIC – Federal Deposit Insurance Corporation
Protects depositors of insured banks when those banks fail.
Covers checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs).
Does not cover stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities.
Coverage: Up to $250,000 per depositor, per insured bank, for each account ownership category.
The Takeaway
SIPC and FDIC are like the Batman and Superman of the financial world—SIPC protects your investments, FDIC guards your bank deposits. Just remember, neither can save you from bad investments or market downturns.
Creating an optimal financial planning strategy that works for you depends on many factors—including your personal or business goals. We’re here to help with that.
This article is brought to you by the wizard behind the scenes with 23 years of experience, Dan Dillard. Of course, with his workshop of helpers, including some handy hi-tech sourcing.
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DISCLAIMER: We are legally obligated to remind you that the information and opinions shared in this article are for educational purposes only. These are not financial planning or investment advice. For guidance about your unique goals, drop us a line at info@nestfinancial.net.