Instead, your cash balances are protected by SIPC and are typically swept into eligible partner banks. However, the cash and securities held in your Fidelity account are protected through a combination of SIPC insurance and excess coverage agreements, creating a robust safety net that functions differently from standard bank deposit insurance.
How Fidelity Total Account Coverage Works With SIPC and Bank Partnerships
Conversely, the Securities Investor Protection Corporation (SIPC) protects customers of failed brokerage firms like Fidelity. This structure means your liquidity is shielded by both brokerage-level and bank-level protection layers.
Understanding the Difference Between FDIC and SIPC The Federal Deposit Insurance Corporation (FDIC) insures deposits held in banks and savings institutions, protecting up to $250,000 per depositor, per insured bank. How Fidelity Protects Your Cash Because Fidelity is a brokerage, it does not hold your money in a deposit account subject to FDIC rules.
How Fidelity Total Account Coverage Works With SIPC and Bank Partners
Certain asset classes and products are excluded, including commodities held outside of a brokerage account, life insurance policies, and fixed annuities. The short answer is no, Fidelity Investments itself is not FDIC insured because it is a brokerage firm, not a deposit-taking bank.
More About Is fidelity investment fdic insured
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