Brokerage accounts aren’t FDIC insured by default; only swept bank deposits can qualify for FDIC insurance.
When you hold money at a brokerage, you’re often using two systems at once: securities custody for investments and bank deposits for idle cash. The screen can blur that line. This article shows where FDIC insurance can show up, where it can’t, and how to confirm your setup before you park cash. You’ll see the rules in plain English.
How FDIC Insurance Works With Brokerage Cash
FDIC insurance applies to deposits at FDIC-insured banks. It’s built for checking, savings, money market deposit accounts, and CDs issued by banks. It does not apply to stocks, bonds, ETFs, mutual funds, crypto, annuities, or losses from price swings.
A brokerage can still offer access to FDIC insurance when it routes your uninvested cash into partner banks through a cash sweep or cash management deposit program. In that case, the bank deposit may be insured, not the brokerage wrapper.
| Where Your Money Sits | What You Usually See | What Protection Fits |
|---|---|---|
| Swept cash at one FDIC-insured bank | Cash / Sweep / Program Bank | FDIC insurance at that bank, within limits |
| Swept cash split across multiple program banks | Cash sweep across partner banks | FDIC insurance per bank, within limits |
| Money market mutual fund inside brokerage | Money market fund | No FDIC; held as a brokerage asset |
| Bank savings account opened inside a brokerage app | High-yield savings / deposit account | FDIC insurance if the bank is insured |
| Brokered CD purchased through a brokerage | Brokered CD | FDIC insurance if issued by an insured bank |
| Treasury bill held in brokerage | T-bill / Treasury | No FDIC; held as a security |
| Stocks, ETFs, mutual funds | Investments | No FDIC; market risk applies |
| Margin loan and collateral | Margin balance | No FDIC; governed by margin agreement |
| Crypto held at brokerage or partner | Crypto | No FDIC; platform terms apply |
Are Any Brokerage Accounts FDIC Insured? With Cash Sweep Programs
Not in the same way a bank account is. A brokerage account can include FDIC-insured deposits if your cash is swept into FDIC-insured program banks or held in a deposit account. Ask these questions: which bank holds the cash, is that bank FDIC-insured, and what’s your total at that bank across all accounts you own.
If you want the plain wording to remember, it’s this: are any brokerage accounts fdic insured? Only the bank-deposit piece can qualify, and only when it’s actually deposited at an insured bank.
Cash Sweep Programs
Many brokerages move idle cash into partner banks each day. If those banks are FDIC-insured, the swept cash may qualify as an insured deposit. Insurance limits apply per depositor, per insured bank, per ownership category.
Look up the sweep disclosure for your account type. It should list the program banks, allocation rules, and how to switch from sweep cash to a different cash option if your broker offers one.
Cash Management Accounts With Checking-Style Features
Cash management accounts can come with debit cards, bill pay, and ATM access. Under the hood, many pair a brokerage account with a bank deposit sweep. The spending features don’t decide insurance; the location of the cash does.
If your cash sits in a money market mutual fund, it isn’t FDIC insured. If your cash is deposited at program banks, FDIC insurance may apply at those banks.
Brokered CDs And Deposit Products
Brokerages often sell CDs issued by banks. A brokered CD can be FDIC-insured if the issuing bank is FDIC-insured and the CD is titled in your name. Your deposits at that same bank still add together, even if some of them came through a brokerage.
FDIC Vs SIPC
FDIC and SIPC protect different failure events, and that’s where confusion comes from.
FDIC Protects Deposits When A Bank Fails
FDIC steps in when an insured bank fails. It applies to eligible deposits up to the limit for the ownership category. For the current rules and examples, check the official page on FDIC deposit insurance.
SIPC Helps When A Brokerage Fails And Assets Are Missing
SIPC is about custody at a SIPC-member brokerage. If the brokerage fails and customer assets are missing, SIPC works to return securities and cash that should be in your account, up to its limits. It doesn’t apply to market losses or a stock dropping. The clearest overview is SIPC protection scope.
How FDIC Limits Add Up At Program Banks
FDIC insurance is measured at the bank level, not at the brokerage level. The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each ownership category. That means your sweep cash at Bank A is counted with any other deposits you hold at Bank A, even if those deposits live at a different app.
Ownership category is the other moving part. An individual account and a joint account can be insured under different categories, with their own caps, as long as the account titling matches FDIC rules. If you share finances with a spouse, it’s worth sketching a quick map of which bank holds what and under whose name.
- One bank, many logins: balances still add together at that bank.
- Many banks, one sweep: insurance can rise, but only if your deposits don’t overlap with banks you already use.
- One person, many ownership types: categories can change the math, so check titling on statements.
Common Mix-Ups That Cost People Money
Thinking A Money Market Fund Is The Same As A Deposit
A money market mutual fund is an investment product. It can be steady, yet it’s not a bank deposit and it isn’t FDIC insured. If it’s held at a brokerage, it may fall under SIPC if the brokerage fails and assets are missing, but that’s a different risk than deposit insurance.
Seeing “Up To” Insurance And Skipping The Bank List
Some programs advertise higher FDIC totals by spreading cash across many partner banks. That can work only when your cash is actually deposited at separate FDIC-insured banks and you don’t already hold deposits at those same banks that push you past limits. The bank list in the disclosure is the part that matters.
Forgetting You Already Bank At A Program Bank
FDIC limits aggregate across your deposits at the same bank. If your brokerage sweep uses Bank X and you already keep savings at Bank X, the totals add together. This is one of the easiest ways to be over the limit without noticing.
How To Verify Insurance In Five Minutes
- Find the cash option you’re using. In settings, look for “sweep,” “cash program,” or “cash management.”
- Identify the program banks. Write down each bank name the broker uses for your account.
- Check whether cash is a deposit or a fund. If it’s a mutual fund, it’s not FDIC insured.
- Add up your deposits at those banks. Include accounts you hold outside the brokerage too.
- Save the disclosure. Programs change banks, so keep a copy of what applied when you funded the account.
Protection Checklist By Holding
This table helps you decide what backstop you’re relying on before you move a large cash balance.
| Holding | FDIC Possible? | Fast Check |
|---|---|---|
| Cash sweep to partner bank | Yes | Which banks, and your totals per bank |
| Cash in money market mutual fund | No | Fund name in the position list |
| Deposit account inside brokerage app | Yes | Legal bank name and FDIC status |
| Brokered CD | Yes | Issuing bank and account titling |
| Treasury bills | No | Held as a security on statements |
| Stocks, ETFs, mutual funds | No | SIPC member status and statements |
| Margin loan and collateral | No | Margin agreement terms |
| Trade settlement cash | Maybe | Whether it stays in sweep during settlement |
Ways To Set Up Cash And Investing Without Guesswork
You can use a brokerage for investing and still keep cash rules clean. A few habits go a long way.
Match Each Dollar To A Job
Keep “spend soon” cash in an insured bank deposit where access is simple. Keep “invest later” cash in your brokerage cash option. When each pile has a purpose, you’re less likely to chase a yield headline and miss an insurance detail.
Track Bank Concentration If You Use Sweeps
If you keep a large cash balance in a sweep, the partner bank list is part of your risk management. A one-bank sweep is easy to understand, yet it can collide with your other deposits at that same bank. A multi-bank sweep can spread deposits, yet you still must watch overlap with banks you already use.
Use Statements As Your Reality Check
Statements show what you own and where it sits. Look for wording that says your cash is held at program banks, or that your cash position is a mutual fund. If you don’t see that detail, dig into the cash program disclosure.
When To Recheck Your Setup
Recheck when you: move a big new cash balance in, open a joint account, add a second brokerage account, or change your cash option. Also recheck if the broker notifies you that program banks changed. A two-minute check now can save you a weekend of stress later.
What To Remember Before You Transfer Funds
Brokerage accounts aren’t FDIC insured as a whole. FDIC insurance can apply to the bank-deposit portion when your cash is placed at FDIC-insured banks through a sweep or deposit account. SIPC is a separate backstop for missing assets if a SIPC-member brokerage fails.
One last time, in plain words: are any brokerage accounts fdic insured? The answer depends on where the cash is parked. Verify the cash option, note the program banks, and total your deposits per bank before you treat “cash” as insured.