Are Fidelity Funds Insured? | What Coverage You Get

No, Fidelity mutual funds aren’t FDIC-insured; coverage depends on whether assets sit in a bank sweep or in a brokerage account.

If you’re asking “Are Fidelity funds insured?” you’re usually trying to answer one thing: if Fidelity fails, do you lose your money? The cleanest way to get there is to split two risks that often get tangled.

• Market risk: fund prices move. No insurance program blocks gains or losses.
• Custody risk: the firm holding your assets can fail. That’s where SIPC and FDIC rules show up.

Below you’ll see what applies to Fidelity mutual funds, money market funds, and cash positions, plus a checklist you can run against your own statement.

Are Fidelity Funds Insured? What The Word “Insured” Means Here

“Insured” can mean bank deposit coverage or brokerage custody protection. The label changes the answer.

FDIC insurance is for bank deposits held at an FDIC-insured bank. The FDIC’s standard limit is $250,000 per depositor, per insured bank, for each ownership category.

SIPC protection is for customer cash and securities held at a SIPC-member brokerage firm when the firm is in financial trouble and customer property is missing. SIPC’s general limit is $500,000 per customer, including a $250,000 limit for cash.

Mutual funds fall under “securities,” not “bank deposits.” That single detail clears up most of the confusion.

How Fidelity Mutual Fund Ownership Is Kept Separate

Fidelity states that mutual fund assets are held by each fund’s custodian, separate from Fidelity’s own assets, and are not available to satisfy Fidelity’s obligations. That’s true whether you hold fund shares through a brokerage account or you own fund shares recorded directly on the fund’s books.

This matters because most “firm failure” fears are mainly about custody: can you still get your shares back if the broker has problems? That’s the narrow scenario SIPC is built for.

When Funds Are In A Brokerage Account

If your mutual funds are held in a Fidelity brokerage account, they are securities in that account. In a brokerage failure where customer property is missing, SIPC protection can apply up to its limits. Fidelity also describes additional “excess of SIPC” coverage for brokerage customers, layered on top of baseline SIPC, with cash and policy limits.

When Funds Are Held Directly With The Fund

Fidelity notes that SIPC and excess coverage apply to brokerage accounts, not directly held mutual fund accounts. Still, the core idea remains: you own shares of a fund whose assets are segregated at the custodian level.

Where People Get Tripped Up: Money Market Funds Versus Bank Sweeps

At Fidelity, “cash” can sit in different places, and the protection changes with the container.

Money market funds are mutual funds. Investor.gov’s money market fund bulletin explains that money invested in a money market fund is not guaranteed by the FDIC like bank accounts are, and investors can lose money.

Bank sweep programs move uninvested cash into deposit accounts at program banks. Deposits at FDIC-insured banks can be covered by FDIC insurance, subject to FDIC rules and limits.

Simple rule: money market fund shares are securities; bank sweep balances are bank deposits.

Quick Ways To Tell What Protection Applies In Your Fidelity Account

You don’t need to guess. Most of what you need is on your statement and in your cash position details.

1. Identify the account type. Brokerage and IRA accounts are not bank deposit accounts.
2. Check what “cash” is set to. A money market fund position is a security. A sweep program places cash at a bank.
3. Find the bank on sweep details. FDIC insurance is tied to the insured bank holding the deposit, not to the brokerage name on the statement header.
4. Review ownership category and registration. FDIC limits reset by ownership category. SIPC limits track separate capacities at a member brokerage.

If you want the official wording on how Fidelity treats brokerage positions, mutual fund accounts, and excess coverage, see Fidelity’s account protection overview.

Coverage Map For Common Fidelity Holdings And Account Setups

This table is a sorter. It tells you which rulebook to read next, not what your balance will be after a crisis.

Holding Or Setup	What It Is	What Protection Fits
Fidelity mutual fund in a brokerage account	Security held at a brokerage	SIPC can apply in a missing-assets brokerage failure; market losses aren’t covered
Fidelity ETF in a brokerage account	Security held at a brokerage	SIPC can apply in a missing-assets brokerage failure
Stocks or bonds at Fidelity	Securities held at a brokerage	SIPC can apply in a missing-assets brokerage failure
Money market fund used as a core position	Mutual fund shares	Not FDIC-insured; treated as a security for brokerage custody purposes
Cash in an FDIC-insured sweep	Bank deposit at program bank(s)	FDIC rules can apply at each insured bank, up to program limits
Brokered CDs held through Fidelity	CD issued by a bank, held in a brokerage	FDIC insurance can apply at the issuing bank; SIPC can apply to custody if a broker fails with missing property
Workplace plan assets held in trust	Plan assets segregated under plan rules	Segregation rules limit creditor access; details vary by plan
Directly held mutual fund account (not brokerage)	Fund shares recorded on the fund’s books	SIPC is not the program for this setup; fund custody segregation still applies

What SIPC Covers And What It Doesn’t

SIPC is often called “brokerage insurance,” yet it has a narrow target: missing customer property when a member brokerage fails. SIPC says it protects against the loss of cash and securities held at a financially troubled member brokerage, up to $500,000 per customer, including a $250,000 limit for cash.

• It covers custody failures. Think “the broker can’t return what it should be holding.”
• It does not cover price drops. If your mutual fund falls because markets move, SIPC doesn’t repay that loss.

You can confirm the limits and scope on SIPC’s page on what it protects.

What FDIC Covers And What It Doesn’t

FDIC insurance is for deposits at FDIC-insured banks. It does not cover mutual funds, ETFs, stocks, or bond funds. FDIC guidance states the standard maximum deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.

If you use a sweep that places cash at multiple program banks, your coverage depends on (1) which banks receive your cash and (2) what other deposits you already hold at those same banks in the same ownership category.

The FDIC’s Your Insured Deposits brochure explains the rules in plain language.

How To Reduce The Risks You Can Control

You can’t control daily fund pricing. You can control clarity on the container your money sits in and the paperwork that proves what you own.

Match Your Cash Choice To Your Goal

If you want bank-style deposit coverage on idle cash, see whether your account offers an FDIC-insured sweep option. If you hold a money market fund, treat it as an investment product, not a deposit account substitute, even when it aims for a stable share price.

Use Registrations Intentionally

SIPC coverage tracks separate capacities at a broker, and FDIC coverage tracks ownership categories at a bank. Read the exact account registration on your statement so you know how the rules apply.

Keep Records Ready

Download periodic statements and confirmations. Keep a short list of account numbers, registrations, and beneficiary designations. If you ever need to document a claim, clean records speed things up.

How To Read Your Fidelity Statement Without Guessing

Start with the line items, not the brand name at the top. Statements often list a “core position” or a cash line that looks like cash, yet it may be a money market fund share class. That detail tells you whether you’re holding a security or a bank deposit.

Next, scan for any sweep language. If the statement or cash details list one or more program banks, that points toward deposit placement and FDIC rules at those banks. If there’s no bank list and the cash shows a fund symbol, treat it as a fund position.

Then match the registration. An IRA, an individual brokerage account, and a joint account can each be treated differently under coverage rules. The registration wording on the statement is the source of truth, so save a PDF copy each quarter.

Second Table: Fast Checklist To Answer This For Your Own Accounts

This checklist keeps you out of the “insured vs invested” mix-up and gets you to a clear yes/no on what program applies.

Check	What To Look For	What It Tells You
Cash position name	Money market fund symbol vs sweep deposit description	Security position vs bank deposit
Sweep bank list	Which FDIC-insured bank(s) receive the deposits	Where FDIC rules attach
Your other deposits at those banks	Checking, savings, CDs in the same ownership category	Whether you may exceed FDIC limits at a given bank
Account registration	Individual, joint, IRA, trust	Separate capacity for SIPC and ownership category for FDIC
Securities held at the broker	Mutual funds, ETFs, stocks, bonds	SIPC is the custody backstop for missing property events
The risk you’re worried about	Price moves vs broker failure	Insurance deals with custody risk, not day-to-day prices

Takeaway You Can Act On Today

Fidelity mutual funds are investments, not bank deposits, so they aren’t FDIC-insured. Your protection depends on where the assets sit: bank deposits can fall under FDIC rules, and brokerage custody can fall under SIPC rules when a member broker fails and customer property is missing.

If you want a fast reality check, open your latest statement and confirm whether idle cash is a money market fund position or an FDIC-insured sweep deposit. That single step usually answers the real question behind “Are Fidelity funds insured?”