Is Wealthfront a SIPC/FDIC insured brokerage company? Does Wealthfront offer insurance on customer
accounts?
Is Wealthfront SIPC and FDIC Insured?
Wealthfront accounts are safeguarded by both SIPC and the FDIC, with each insurance agency providing
guarantees under specific circumstances. To determine which agency protects your money in a particular
situation, it's important to be familiar with the rules.
FDIC vs. SIPC
To gain a better understanding of how SIPC and FDIC protections function in a Wealthfront investment
account, it is important to examine the distinctions between these two insurance programs.
SIPC serves as the insurance agency for the brokerage industry and is primarily designed to protect
securities, although some protection is also provided for idle cash.
Each Wealthfront account has $500,000
of SIPC protection, and half of this amount can be applied to uninvested cash.
On the other hand, the FDIC exclusively protects cash held in banks. Technically, any cash within a
Wealthfront brokerage account is not FDIC insured.
Similar to SIPC, the FDIC provides $250,000 of insurance coverage for cash. Both entities have
certain loopholes and specific terms and conditions that may allow for doubling or even tripling of
the standard insurance levels.
Wealthfront FDIC Insurance
If you have a Wealthfront checking account, it is insured by the FDIC (Federal Deposit Insurance
Corporation) up to at least $250,0000 per depositor, per ownership category.
Loopholes
FDIC-insured joint accounts have separate insurance limits compared to individual accounts. Additionally, each account owner is entitled to their own limit, which means a joint account automatically receives FDIC insurance of $500,000, double the standard amount.
For SIPC insurance, each "separate capacity," which refers to different account types like traditional IRA, joint account, or trust, is insured up to $500,000.
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Updated on 1/1/2025.
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