FDIC and SIPC: what protects your money in the US
What you'll learn
Know what the FDIC and SIPC each protect, the coverage caps, and what neither protects.
The US has two separate safety nets, and they protect different things: the FDIC covers bank deposits if a bank fails, and SIPC covers brokerage custody if a brokerage fails. Neither one covers investment losses.
Who covers what
| FDIC | SIPC | |
|---|---|---|
| Protects | Deposits: checking, savings, money market deposit accounts, CDs | Cash and securities held at a failed brokerage |
| Cap (2026) | $250,000 per depositor, per insured bank, per ownership category | $500,000 per customer, including $250,000 for cash |
| Triggered by | An insured bank failing | A member brokerage failing with assets missing |
| Never covers | Stocks, bonds, mutual funds, annuities | Falls in the value of your investments |
Both protections are automatic and free. You do not register for them; you simply hold money at an FDIC-insured bank or a SIPC-member brokerage.
The rule most people miss
Neither scheme protects you from market risk. If your fund halves in a crash, that is investing working as designed, and no compensation applies. SIPC exists purely for the custody problem: your broker fails and your assets are not where they should be. The FDIC exists purely for bank failure.
Spreading larger balances
The FDIC cap applies per depositor, per bank, per ownership category, so large cash balances can be split across banks (or held in different ownership categories) to stay inside the limits. The caps above are the 2026 published figures; limits can change, so check the current numbers on fdic.gov and sipc.org before relying on them.
Key takeaways
- FDIC protects bank deposits; SIPC protects brokerage custody. They are different schemes for different failures.
- 2026 caps: $250,000 FDIC per depositor, per bank, per ownership category; $500,000 SIPC per customer, including $250,000 for cash.
- Neither protects against investment losses - market risk is always yours.
- Protection is automatic and free; spread large cash balances across banks to stay inside the FDIC limit.
Coverage limits as published on fdic.gov and sipc.org in 2026. FDIC is per depositor, per insured bank, per ownership category; SIPC is per customer, with $250,000 of the $500,000 usable for cash. Limits can change - check the current figures on fdic.gov and sipc.org.
Frequently asked questions
Do I have to sign up for FDIC or SIPC protection?
No. FDIC coverage is automatic on eligible deposits at an FDIC-insured bank, and SIPC protection is automatic at a SIPC-member brokerage. You do not apply or pay for either.
What does per ownership category mean for FDIC coverage?
The FDIC limit applies separately to each ownership category at a bank, such as single accounts, joint accounts and certain retirement accounts. The same person can therefore have more than one limit's worth of coverage at one bank across different categories.
If my shares fall in value, does SIPC pay me back?
No. SIPC only steps in when a member brokerage fails and customer cash or securities go missing from accounts. Ordinary market losses are never covered by SIPC or the FDIC.
Are mutual funds at my bank covered by FDIC insurance?
No. FDIC insurance covers deposits such as checking, savings and CDs. Investment products sold at a bank, including mutual funds, stocks, bonds and annuities, are not FDIC-insured.
General information, not financial advice. The value of investments can fall as well as rise, and figures and rules can change; check the current position before acting.