Ask Kim

Kiplinger

Insurance on Savings and Investments

Kiplinger.com
[Question]

What's the difference between FDIC and SIPC insurance?

[Answer]

The Federal Deposit Insurance Corp. (www.fdic.gov) protects deposit accounts from bank failures, covering up to $250,000 in individual accounts, up to $250,000 for each person's share of joint accounts, and up to $250,000 in IRAs and other retirement accounts at each bank. The Securities Investor Protection Corp. (www.sipc.org) protects brokerage accounts. Brokerages are required to keep customers' investments separate from the firm's own funds. But if the firm fails and customer assets are missing, the SIPC replaces cash and securities. The SIPC returns your share of the broker's remaining assets, then uses its own funds--up to $500,000 per account, including a $250,000 limit on cash--to buy shares and replace cash.

See Also: 4 High-Yield Spots to Park Your Savings

EDITOR'S PICKS

Copyright 2018 The Kiplinger Washington Editors

More from Kiplinger.com

See more stories in this category

Back to Previous Page

Ask Kim

Cost of Employer Health Coverage to Rise 5% in...

[QUESTION]What should I expect to happen to costs and coverage for my employer's health insurance plan...

Two Medigap Plans to Be Phased Out

[Question]I understand that medigap Plan F is going away in 2020. I've had Plan F for years. Does that...

Legal Documents for College Students

[Question]My 18-year-old son is starting college next month and will be living away from home for the...

Tapping a Roth IRA for a House

[Question] I am 28 and want to buy my first home. I've had a Roth IRA for four years. Can I withdraw...

How to Buy Stocks for Kids

[Question] I used the ShareBuilder program through Capital One, which automatically deducted money...

Next Page >
Provided by Kiplinger