Personal Investments • SIPC insurance for accounts over the $500,000 limit

One thing you need to keep in mind that you don’t get a separate SIPC limit at each brokerage. Each kind of account has a SIPC limit:

Your taxable accounts are covered for $500,000 but it doesn’t matter how many brokerages you have, the covered limit for all your taxable accounts is $500,00 total.

Your traditional IRA is covered separately for $500,000 but it doesn’t matter how many brokerages you have, the covered limit for all your traditional IRA's is $500,00 total.

Your Roth IRA is covered separately for $500,000 but it doesn’t matter how many brokerages you have, the covered limit for all your Roth IRA's is $500,00 total.

with a certain amount of "and so on" for other separate kinds of accounts.

See https://www.sipc.org/for-investors/inve ... e-accounts for details.

Hold on a minute, you mean to tell me that having more than one brokerage company does not help??? I thought this entire time that it did help like FDIC insurance. If that is truly the case, then I might as well move all my assets to one brokerage since it does not matter. That would be both good and bad news (good news of simplicity, bad new for late-stage accumulation).

Look at the link. It is very clear that within account type, you do not get more coverage by having more brokerages.

For example (from the link): "Joe has two brokerage accounts, each in his own name. For purposes of SIPC protection, Joe’s accounts are combined, and Joe is protected by SIPC only up to a total of $500,000."


There are many ways in which people confuse how SIPC works with how the FDIC works and this is one of them.

I don't think it is bad news for late-stage accumulation because a) brokerages have their own additional coverage and b) what SIPC and the supplemental coverage actually covers is very limited and very unlikely to occur at big firms.

This changes my plans, I might as well shut down some of my brokerage accounts. This will probably save me some headache long-term but short-term cause one.

Probably one of the most useful posts I have read here.

Statistics: Posted by aristotelian — Sun Jun 30, 2024 8:43 am — Replies 42 — Views 4215