Is Robinhood a SIPC/FDIC insured brokerage company? Does Robinhood offer insurance on customer
accounts?
Is My Money Insured with Robinhood?
If you’ve ever been curious about how safe your funds are with Robinhood or whether they’re covered by SIPC or FDIC, you’ve come to the right place. Keep reading to learn more about the insurance coverage Robinhood provides.
Because Robinhood is an online brokerage rather than a bank, its regular brokerage account is not covered by FDIC insurance. The Federal Deposit Insurance Corporation (FDIC) focuses on protecting cash deposits at banks. Since Robinhood is not a bank, it doesn’t fall under FDIC rules, so any cash in a standard Robinhood account is not FDIC-insured.
However, cash kept in your
Robinhood Spending account
can be eligible for FDIC coverage of
up to a total maximum of $250,000.
Is Robinhood SIPC Insured?
Robinhood is a member of the Securities Investor Protection Corporation (SIPC). This means the securities you hold with Robinhood are covered up to $500,000, with up to $250,000 for cash claims. SIPC insurance offers protection if the brokerage goes bankrupt or is insolvent, making sure your securities stay safe.
Keep in mind that Robinhood also belongs to the Financial Industry Regulatory Authority (FINRA), with an SEC# of 8-691888 (San Francisco District Office). In July 2021, FINRA ordered Robinhood to pay about $70 million due to widespread supervisory issues and the harm experienced by millions of customers. Even so, thanks to SIPC, your cash and securities are still protected at Robinhood, just as they are at other major brokers.
Free Robinhood Account
Open Robinhood Account
Are Cryptocurrencies Covered by Robinhood?
Be aware that cryptocurrency investments with Robinhood Crypto are not protected by SIPC.
Is Robinhood FDIC Insured?
Robinhood provides a Cash Management feature within its brokerage account. With this, clients can earn 0.50% APY on any cash in the account. Although Robinhood isn’t a bank, it uses bank sweeps to move cash to partner banks. The cash “in” your account is effectively placed at these banks, making it eligible for FDIC coverage (up to $1.25 million total, or $250,000 per partner bank). Robinhood reminds users to keep an eye on their balances to avoid surpassing FDIC insurance limits.
Is Robinhood FDIC Insured Wrapping Up
Overall, your money is well-covered at Robinhood,
except for cryptocurrency
investments. If your funds are in stocks, ETFs, or cash not swept to a bank, SIPC covers them. Once those funds move to a partner bank, FDIC takes over.
Robinhood Promotion
Robinhood Review
Robinhood has exploded in popularity as a commission-free app for trading and investing in stocks. It stands out for its zero-commission trades, focus on meme stocks and crypto, and appeal to younger investors.
Does that make it the best broker for you? Maybe.
Find out more in
Robinhood Review
Updated on 3/11/2025.
Continue Reading