Reddit Posts
Brokerage failure and margin accounts and short lending
What's the absolute maximum you can have in Robinhood?
Whenever u r using US exchange broker, Make sure it's SIPC registered.Because The US govt under securities & investor exchange protection act will return ur money in any case. I am using ALCAPA. India is not a problem everything is SEBI registrated.
Does anyone insure their account more then SIPC offers?
Fidelity Removes All Money Market Sweeps Except FCASH from Non-retirement Accounts
Looking for a new Broker and trading platform!! Suggestions needed!
SIPC Coverage - Is it per Broker, per Account, or something else?
Why does my margin balance keep growing despite not buying on margin? Also FDIC insured deposit?
CME Group: if you think WTI is a manipulated commodity or a necessity- it once upon a time was until 1983
What'd happen to my t-bills if they mature during the default of a broker ?
SIPC insurance limits - combined for multiple broker accounts?
Shorts too far on this! Too early for accurate short data. $CWD is Starting to Bounce from Extreme Oversold Zone!
Back to the NAZ! $CWD is Starting to Bounce from Extreme Oversold Zone!
I have some money I'd like to put in HYSA, but I have some questions.
How are your deposits and investments protected if your bank bankrupts?
How are your deposits and investments protected if your bank bankrupts?
ELI5: How are Government money markets held primarily in agencies and repo agreements not the absolute safest places to store money, even above FDIC or SIPC?
SIPC limitations for currency held on a brokerage account
Are ETFs protected by SIPC? I didn't see ETFs in the list of securities protected by SIPC at https://www.sipc.org
What investor protections exist for the cash that is held for cash secured puts?
Are money market funds like VUSXX considered a security? Do you still own the security if the firm fails?
As an individual investor, what risk do I have if my broker goes under?
For Those Over FDIC (or SIPC) Limits, What's Your Strategy?
SIPC insurance: Is it meaningless if a brokerage goes bankrupt?
Silicon Valley Bank $SIVB Collapse Explained Like I'm 5:
Silicon Valley Bank $SIVB Collapse Explained Like I'm 5:
Silicon Valley Bank $SIVB Collapse Explained Like I'm 5:
Silicon Valley Bank $SIVB Collapse Explained Like I'm 5:
NO SIPC INSURANCE on Lent out shares during a Bank Run. It is YOUR Responsibility to make sure it is turned off. Here is how.
Is it safe to leave a large amount of money in fidelity?
eToro vs Revolut: Which Platform Is Better For Trading and Investing
"Fully Paid Securities Lending" rates and general opinions on programme
SIPC Coverage / Splitting Money Across Multiple Financial Servcies Companies
Question about SIPC insurance, "Customer Name Securities" in terms of brokered cds.
public.com offering up to $10k for transferring stocks?
Claiming your stocks via SIPC when your broker goes bankrupt
Do any of you keep amounts above FDIC/SIPC limits in your accounts?
Hey, Working stiff here.🙋♂️ I have an important question for those who know more than me.
Fidelity representatives are trying to help buy their technical issue is putting me at risk of margin call. Fidelity also removed my post
What happens if Webull vanquishes due to liquidity issues
Mentions
There’s also $50 million per account in excess-SIPC insurance. https://robinhood.com/us/en/support/articles/how-youre-protected/
[https://robinhood.com/us/en/support/articles/deposit-sweep-program/](https://robinhood.com/us/en/support/articles/deposit-sweep-program/) Your uninvested money is put into partner banks. Your securities are with Robinhood. You have $2.25 million FDIC insurance and $500k SIPC insurance, they don't cancel each other out, they are separate.
Shares lent through Fully Paid Lending services do not receive SIPC insurance. Considering that lent shares are more-than-fully collateralized, does the lack of SIPC protections create *any* risk for the investor?
SIPC has made 99 percent of filers whole in its history. If you're sitting on over 250k in cash you'd open up a new account elsewhere. The likelyhood of what you're describing is nearly zero.
Nope, no lockup period at all. Price appreciates and resets every month so if you don’t wait a full month, you get the cap gains, if you do wait, then you get the monthly divy, then rinse and repeat. It’s in a brokerage account so not FDIC, but your broker should be SIPC. Regardless, it’s an etf, not a stock so there’s no risk of bankruptcy (especially because underlying is US tbills). It’s the closest performance you can get to buying actual tbills without having to actually go through the process to purchase them. I think the SEC yield right now for it is around 5.25 or 5.3% vs the 3 month tbill trading around 5.35 or 5.4%.
What black swan event has caused a self directed brokerage account to lose its cash? Have you not heard of SIPC insurance?
I am intimated familiar with how SIPC works. In the US - there has not been a broker that has gone into receivership in a really long time. And when a broker fails or becomes insolvent in the US - customer accounts are simply moved into another broker or the account closed and net liquidation value returned to the investor. You fail to grasp how brokers actually work in the US. Customer assets are not assets of the broker. In many other countries - it works in a similar manner. Maybe in your country - it doesn't work that way. But you haven't answered the most basic question that has been asked to you if you want an answer - what country are you in? Brokers are regulated financial entities and they cannot provide services unless they are authorized to provide those services in that country.
SIPC (Securities Investor Protection Corporation) covers up to $500,000 per account holder, of which $250,000 can be used to cover losses due to broker insolvency, if your broker goes bankrupt, SIPC will work to recover investors' assets. In some cases, the insolvent broker may be liquidated and its assets sold to cover debts. During this process, your shares may be sold on the market... :) I'm in EU, it's the same here and everywhere else in the "west". I don't see what's strange about looking for a broker in a country that isn't implicated in semi-global conflicts.
Geesh - I can't believe you are basing your comments on the failure of Community Bankers MMF. Money market funds have not worked that way in decades. It is the only fund other than the reserve fund in 2008 that has ever broken the buck. Rule 2a-7 would never allow SPAXX to lose value in the same way as you suggest. And the liquidity rules that were proposed and adopted last year reduce liquidity risks even more. The only recent time that there was a liquidity risk was during the Covid crisis - but all redemptions were met by every money market fund in the US because the Fed provided a temporary backstop liquidity facility. The number of money market funds that have failed in history in the US in 2. The number of banks that have failed in the US just in 2023 that entered FDIC receivership is 5. And as far as I know - no brokers have entered into SIPC receivership in years.
The reason why FDIC insurance exists is because of how bank deposits get used by a bank and how it is part of a bank's balance sheet. It's not accurate to say that FDIC is better than SIPC because they solve different risks. You comment about money market funds makes zero sense - what kind of derivatives do you think play a role in the NAV of a money market fund. A money market's risk is primarily from liquidity - in the same way that a bank run can place a bank at risk.
Anyone doing something with crypto have been getting notices because the SEC is finally taking some action. Non-event for the rest of Robinhood. As far as regular investments: https://robinhood.com/us/en/support/articles/Account-protection-with-SIPC/
A broker-dealer failure where the SIPC takes over is pretty rare. Normally, a failing brokerage would go through an orderly liquidation and transfer before the SIPC gets involved. For example - even when FTX failed due to fraud - the non-crypto assets were custodied at a separate broker-dealer called Embed Clearing. When Embed Cleared shutdown - assets were returned to customers or transfered - afaik - SIPC was not involved. The only open case at the SIPC at the moment is the Bernie Madoff case when has been ongoing for a few decades - [https://www.sipc.org/cases-and-claims/open-cases/bernard-l-madoff-investment-securities-llc/](https://www.sipc.org/cases-and-claims/open-cases/bernard-l-madoff-investment-securities-llc/) The last open case that I'm aware that was closed in 2022 was the Lehman case. That doesn't mean that brokers don't shutdown or merged/acquired - in 2023 - there were 169 brokers that were terminated.
I did this exact move. I’m not an active trader so figured I may as well get something out of it. Keep in mind SIPC insurance is 500k. All brokerages say they self insure in excess of that, but I’d be more comfortable keeping it under the 500k cap.
Both Webull and Robinhood are pretty solid when it comes to security. They're legit, registered with the SEC and part of FINRA. Plus, they both offer SIPC insurance, which means your investments are protected up to $500,000, with $250,000 of that for cash claims. Now, when it comes to earning some extra income on your idle cash, Webull takes the lead. They offer 5.00% APY with no extra fees attached. On the other hand, with Robinhood, you gotta be a Robinhood Gold member to score that 5% annual percentage yield. Otherwise, you're stuck with 0.01% APY starting from May 2024 for non-Gold members. And here's the kicker: to get access to Robinhood Gold perks, you gotta cough up $50 a year or $5 a month. So, with Webull, you're getting a straightforward high yield on your cash without any extra costs.
Can you name any time since SIPC was founded where anyone ever lost shares of publicly traded firms they were invested in, where direct registering would have saved them? Just one example. It's been like half a century surely if that were true there would be one example.
I personally questions RH’s seeming desperation for new money coming in. Even if it’s legit and they don’t have any trouble on the horizon, I’d imagine you’re going to lose way more than 1% over the time period due to either increased fees from RH gold or drag from more aggressive payment for order flow. This 1% bonus is not appearing from thin air—it is being generated either from fees or from less ideal pricing due to payment for order flow (I am aware that other brokers also use payment for order flow, I’m just saying that RH could be generating this money by giving customers less ideal pricing than they might find elsewhere, but payment for order flow is so opaque that I can’t imagine being able to know this for sure as a customer). People should also be aware of coverage limits from SIPC—that only covers you for $250k of cash/$500k of securities. Most people won’t have that problem, but OP suggests rolling over $500k of assets from vanguard—if the unimaginable happens and RH somehow fails on their obligations as a broker, OP could be well in excess for SIPC coverage. And with their past issues, I personally have no intention of ever doing business with them, especially at levels beyond SIPC coverage.
They were offering 3% up until last month. I transferred and got the 3%. Bought stocks with it. They are SIPC so I consider it pretty locked in at this point unless they are a literal Madoff level scam.
SIPC limits are mostly relevant for cash. The securities themselves (except maybe weird stuff like fractional shares) are registered with the DTC and wouldn't typically be contested in the event of a brokerage failure
I mean the SIPC limit is $500k. By moving on at a $265k cost basis I’m ensuring my capital is safe, and so are some of the gains in case of a failure. While brokerages are not a bank in terms of the reasons you stated the risk of failure always exists. The goal isn’t to stay under the SIPC limit in terms of value but just capital. I’m thinking of Fidelity due to fractional shares which VG doesn’t have beyond its index funds. Could help big time with DCA. Schwab also has a limit in terms of only 500 companies. IBKR is too confusing, and also charges a commission I believe. My monthly budget is usually $5k but I do have around 5 larger buys a year. Recent example would be $10k into Meta at $426 vs $410 bottom after market trading. Largest buy was $35k into Google in 2023. I move on when the value in the brokerage hits $300k.
>I’m opening up a new brokerage account because I want this one to be under the SIPC limit for as long as possible. I’ll rebalance of course but no more active buying. Also just add to a thought , opening up different brokerages isn't really an issue unless you want to use different features of the brokerage Like if you have a vangaurd brokerage that you invest in index funds but want to actively trade more well vangaurd is not really a great brokerage for active trading by all means open up another account at fidelity or schwab or IBRK or what ever brokerage fits your needs better But opening multipul brokerage accounts to stay under the SIPC limit is not really a thing, brokerages are not bank, they do not comigle assets. Customer assets cannot be used to cover company expenses or creditors cannot lay claim to customer assets
Hi, I am Hikmat from BrokerChooser. Generally, both Webull and Robinhood are considered secure platforms. They're registered with the SEC and are members of FINRA. Both offer SIPC insurance, which protects securities up to $500,000 (including $250,000 for cash claims). Regarding cash management feature, on webull you can Earn 5.00% APY on your idle cash - no fees attached. In Robinhood only Robinhood Gold members can earn a 5% annual percentage yield. The non-Gold cash sweep program APY is 0.01% starting from May 2024. To get access to Gold’s premium features you have to pay a membership fee of **$50 annual or $5 monthly.** So, **Webull** offers straightforward high yield on idle cash without additional costs.
Well Thank goodness that’s not how our financial system works. Beneficial ownership via street name ownership, SIPC insurance, and so much more prevent people from losing their accounts and investments. Quite frankly, a bankrupt brokerage firm would probably take the opportunity to sell the account custody to another brokerage firm. It’s a fantastic way to gain customers. Plus, the likes of Fidelity, Charles Schwab, or Morgan Stanley going under are slim to none.
SIPC protects brokerage accounts up to 500.000 USD, if cash or assets are lost. That's number one. The CCP can confiscate any stocks, delist any company, and do exactly as it pleases, at all times. Which is has done numerous times in the past. Remember online tutoring? China does not allow foreign ownership of its stock market, technically. Instead, they list through shell companies in micro states, such as the Cayman Islands, offering indirect ownership in a company's subsidiary. Their "ADRs" in the US are essentially worthless, subject to the CCP's policies. That's not how we roll in the US. We have real courts, not kangaroo ones, with real laws that aren't rubber stamped. The SEC, CPFB et al have lost numerous cases over the years, which is a healthy sign.
In general stocks are still represented by certificates but it's very rare that certificates are actually issued to individual shareholders. Instead your broker holds beneficial ownership of the stock on your behalf, as a fiduciary or custodian. The electronic records of your holdings is like the records of your money in the bank when you check your balance on a banking app. Proof of ownership would not be very difficult even if the broker went out of business. Others have noted the SIPC which is essentially federal insurance to cover your account in case the broker steals it or goes bankrupt. If you have a broker that anyone has heard of, you're safe.
It is important to realize that a broker is not a bank. A bank takes your deposits, comingles them with other depositors, and lends them out to borrowers. If those loans fail, then the bank can become insolvent, and the money that customers deposited is lost and they are made whole by the FDIC. This is not how brokerages work. A broker maintains custody of your securities - those securities are not assets of the brokerage, and creditors of the broker have no claim on them. There is no solvency risk; if a brokerage fails, customers' securities still exist and can be transferred to another broker. SIPC insurance covers you in the case of embezzlement of securities from your account.
This isn't correct. It is important to realize that a broker is not a bank. A bank takes your deposits, comingles them with other depositors, and lends them out to borrowers. If those loans fail, then the bank can become insolvent, and the money that customers deposited is lost and they are made whole by the FDIC. This is not how brokerages work. A broker maintains custody of your securities - those securities are not assets of the brokerage, and creditors of the broker have no claim on them. There is no solvency risk; if a brokerage fails, customers' securities still exist and can be transferred to another broker. SIPC insurance covers you in the case of embezzlement of securities from your account. Even in the case of Bernie Madoff, his brokerage customers did not lose any money or security. It was his investment clients who were scammed - the fund that he claimed was making double digit returns was just sitting in cash and he was falsifying the value of the fund.
I am from Canada, does the SIPC take care of my accounts too if I buy USA stocks and my Canadian broker goes bankrupt?
The risk depends on whether your broker is Bernie Madoff or not. A reputable broker is required to maintain securities sufficient to cover customer positions. There is some small risk in the event of insolvency of a reputable broker that, due to recent trades, there is a shortfall of securities to cover positions. There is also SIPC insurance.
Yes brokers can and will sell your securities in a force liquidation. That’s the reason SIPC exist.” SIPC protects against the loss of cash and securities – such as stocks and bonds – held by a customer at a financially-troubled SIPC-member brokerage firm. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash . Most customers of failed brokerage firms are protected when assets are missing from customer accounts.” https://www.sipc.org/for-investors/what-sipc-protects why do you think transfer agents don’t need to carry SIPC insurance? The security is in your name and only you can sell it.
1. The shares are transferred to another broker via SIPC or similar if you're in another country. 2. Besides voting rights you can still print off stock certificates.
You’re right, I forgot to specify if your broker is set up in any way as a bank that this is possible. It ifs a pure brokerage this is not possible and SIPC should protect the investor.
So the Securities Investor Protection Corporation (SIPC) arranges the transfer of the failed brokerage's accounts to a different securities brokerage firm. If the SIPC is unable to arrange the accounts' transfer, the failed firm is liquidated. I don't really know what the liquidation process would look like or what you end up with
They give you the 3% right away and I bought stocks with it. So unless they're a literal Madoff level scam where they don't even buy the security, those stocks are in my name, or I guess technically my IRA's. If they are a straight up scam though everyone else's SIPC fees will bail us all out lol.
The money is still insured by SIPC. Even if Robinhood goes under, OP’s money, including the match up to that point, would be theirs.
Yep, robinhood is SIPC and legit just like anyone else. If you just buy & hold you don't even have to log in for the 5 years. Free 3%, I don't know how they afford it, but its stupid to pass that free money up if you have any significant amount in an IRA.
> RH is fine and they are FDIC insured for more money than any of you have on here Robinhood is a brokerage, not a bank. FDIC does not apply to investments. If I recall correctly it might apply to your cash balance because they funnel that through several actual banks, but it seems unclear how the FDIC would untangle that. Your investments are covered by SIPC. Importantly, this does not protect from loss of value. What it protects you from is Robinhood literally losing your investments -- like if they stole your stocks to pay their own debts or something.
I am exposed also lol 😂 way over SIPC coverage on my Schwab acct.
If only this is what SIPC did hahah
Hi i was told any losses on robinhood are insured by SIPC, i would like a refund please 🤓
1) SIPC protects against the brokerage failing - [SIPC - What is SIPC?](https://www.sipc.org/for-investors/introduction) 2) No, TOS Is very powerful and capable that can help you make more profitable trades, plus manage your account better. Like learning to drive a Ferrari you will want to learn how to handle such a powerful broker app. Take the time and learn it. There are many videos and other training online, but it will take some time. Start here - [Learning Center (thinkorswim.com)](https://tlc.thinkorswim.com/center) There are many on r/Thinkorswim who can help if you get stuck. 3) Click 'All', then 'Filter and then 'Order Status' to get what you want. It really is not that complex. In general trading is better on a desktop and full screen, so you always give up something when using a mobile device. However, many are able to use phones or tablets to trade. Tablets can offer a better experience, and some laptops can be very small. As you are limited in what you can do during the day, you might consider finding a strategy that will not require as much interaction. Things like opening 30+ dte so that there is less need to make adjustments, and automating closing using GTC limit orders can both be very helpful. It's all about the strategy and process to fit it into your schedule.
OP also doesn’t know the first thing about brokerages. They don’t need a bailout. If they go under your money is insured through SIPC for $500K per account. And that’s not even accounting for the fact that all your invested securities are held in a separate firewall outside of the brokerage’s legal reach. Meaning that if there is a cash shortage at say Fidelity, they aren’t allowed to touch your investment accounts and you don’t lose anything unless they break the law and start giving away your property. And no manager at Fidelity wants to go to jail for that, and even if they do, that’s when SIPC insurance kicks in. If they go bankrupt the ONLY thing you have to worry about is a few days of no access while everything is sorted out and your entire acct is transferred to another brokerage. And to play devils advocate, if they ever do need a bailout (this has nothing to do with the safety of your assets but it’s to preserve jobs and the too big to fail scenario)… in what world is the gov not going to bail out Fidelity???
WellsTrade even though I know I’ll get slack but they have been heavily regulated the past few years. Their brokerage is very good I have a Schwab and Fidelity for comparison. Their brokerage is covered by SIPC and Lloyds. You can buy stock fractions starting at $10 and you can buy anything. You’re not limited to the S&P 500 like at Schwab it’s much cleaner and you avoid a lot of the junk stocks Fidelity likes to show you. In addition you can connect a Wells Fargo checking directly to it and you’ve got branches you can visit for help or to deposit into your checking or brokerage. Also I’ve never used a computer I’ve strictly used WellsTrade on my iPhone works great!
Robinhood and Vanguard are your best options. Also, you could just use Fidelity too. All the brokerages in the U.S. have the same SIPC insurance. They’re all equally safe.
I still dont understand. Youre worried Robinhood will go bankrupt? Why? Your holdings are covered by SIPC and will simply be transferred to another brokerage in the extremely unlikely event that happens.
Most likely failure mode is they get acquired by another brokerage. SIPC is mainly relevant for cash. Securities are held at DTC, even in a messy failure those should be fine. But it would be annoying for sure
My only concern is that you need to keep your money there for 5 years. Will Robinhood be around in 5 years? I don’t know. SIPC only covers up to $500k.
>it's pointless opening new accounts with the same provider It depends. Some people like to have separate accounts to segregate trading vs investing. Different account types are also treated separately - so a Roth account and a taxable account are considered separate accounts for SIPC coverage. So are joint accounts from individual accounts. In general - unlike banks - because customer brokerage accounts are separate from the broker's balance sheet - it's usually not an issue. That's why there are rules for things like margin and net cap requirements, security collateral, etc. for brokers.
Thanks for clarifying that I'm looking at SIPC and not FDIC. > Note that like in banks - multiple accounts of the same type in the same name are aggregated for coverage purposes so having multiple taxable accounts in your own name is the same thing. Interesting, so it's pointless opening new accounts with the same provider. > However - many brokers also carry what is known as excess of SIPC insurance so that the insurance limits are much high - usually in the several million-dollar range. That's good to hear - and makes my (future) worries easier. It's unlikely I'll ever have more than a million or two, lol.
I think you are misunderstanding a few basic things. FDIC provides insurance coverage for bank depositories and not other types of accounts. A brokerage account is structurally different than a bank. Brokerage accounts are legally segregated from the operations of a broker. So - if a broker becomes insolvent and the business is seized by regulators - the SIPC arranges for the orderly transfer of the accounts at the failed broker to another broker. The SIPC will also insure the brokerage account if assets are missing up to 500k including up to 250k in cash. See here - [https://www.sipc.org/for-investors/what-sipc-protects](https://www.sipc.org/for-investors/what-sipc-protects) Note that like in banks - multiple accounts of the same type in the same name are aggregated for coverage purposes so having multiple taxable accounts in your own name is the same thing. However - many brokers also carry what is known as excess of SIPC insurance so that the insurance limits are much high - usually in the several million-dollar range. It's also important to note that the way that custody works in a brokerage account protects investors. A good example is what happened with the massive fraud that occurred with FTX in the US. When FTX failed and was seized - only crypto accounts were impacted. FTX customers who hold stocks and ETFs have their stock accounts in a separate custodial accounts and those accounts were all unaffected by the fraud and eventually transferred to other brokerages when the FTX custody company also failed.
FDIC insurance covers bank accounts and CDs, not brokerage accounts. SIPC is what helps cover if you if something weird happens at a brokerage. If you're really worried about your brokerage failing, then why open multiple accounts at the same one?
SIPC doesn't protect against "breaking the buck". Extremely rare but people should not think that SIPC is the same as FDIC.
It’s VERY safe. Not only does Fidelity money market accounts use SIPC, they have additional coverage thru Lloyds of London. I actually prefer FDLXX, most of the earnings are state tax free.
It’s very safe there. While not FDIC insured, it is SIPC insured. Plus it’s ~5% yield now. If you have a Vanguard account VMFXX is at ~5.25%
Agree. For those worried, SIPC covers up to 500k and RH has purchased additional insurance on top. https://robinhood.com/us/en/support/articles/Account-protection-with-SIPC/ Finally, IF RH went under they would be scooped up by another brokerage and moved over.
You have a self managed, you signed a arbitration agreement. You’re talking about pennys. SIPC covers only if the broker failed.
I just transfer my Roth IRA from Schwab of around 40K and got over 1K of free money with the 3% match. Immediately got VTI (90%) and VXUS(10%) invested. I won't look at that account again until next year to make a contribution and re-balance. I'm also on the credit card wait-list, which I see as a 4% cash back on everything with no caps because if you redeem that 3% cash back to your brokerage they will match with an extra 1%. That 1% match is making me also think about moving funds from my brokerage at Schwab, but haven't looked at the terms yet. I don't know why people hate Robinhood, they look like a no brainier to me and they are SIPC insurred. They are even better for not invested cash at 5% APY.
Take it a step back. The deposits are in a sweep account and are FDIC and/or SIPC insured.
> there is very limited risk that the FRN yield could drop below the fixed T-bills and underperform but the risk of market losses are very close to zero, and small even if the worst comes to pass. I don't care about underperformance. I care about losing the capital. So I think I am sade here. > Maybe iShares would commit financial fraud on a literally unprecedented scale and not own the underlying securities lol I have 500K SIPC insurance so I should be fine then too.
Is it safe for European investor (Poland )to hold ETF? I’m new in investing. 37M from Poland. Started to read posts here from February. I’ve bought some Vanguard and iShares SP500 on Revolut and XTB. Now want to start with IBKR. But now I have concerns about safety of my funds. 1) Revolut - it’s written, that they don’t hold any stocks but third party company does, that SIPC protected for 500k$. So it’s ok, I don’t need to worry? 2) XTB - 100% till 3k eur and 90% for 3-22k eur. So it’s safe for investment of 3k eur. Not interesting 3) IBKR - for Poland it is Interactive Brokers Ireland. And there I see 2 different statements. One - that 90% til 22k euros are protected , and second that SIPC for 500k$ Can somebody tell, if it is safe to keep 100k eur in Revolut and IBKR Ireland ?
Some relevant background learning if you are not aware: You have to pay for safety. On a real basis, after tax, etc, "safe" assets generally lose to inflation(with rare occasional exceptions). Roughly in order of safety: * FDIC insured accounts (HYSA, CD's, etc) * Treasuries(to include I/EE bonds, tips, etc) * Money Market funds(MMF) (SIPC insured) * Cash like ETF's (SGOV, ICSH, USFR, etc) * MYGA's (SPIC insured) * Bank Accounts not FDIC insured, i.e. you went over the FDIC limits. * Stable Value Funds (SVF) * Municipal Bonds (not guaranteed, but generally state income tax free) * Short term bonds * Medium term bonds * Long term bonds * Real Estate(un-leveraged, i.e. no mortgage) * Preferred Stocks * Annuities, not SPIC insured * Leveraged Real Estate (i.e. mortgaged) * Equities FDIC insured accounts, MMF, generally lose to inflation. Some treasuries should keep up with inflation at least(TIPS, iBonds, etc) but after taxes, you probably won't. MYGA's are in the same boat, you might be able to beat inflation, but maybe only barely(and involve lots of insurance paperwork, apparently) and after taxes, doubtful. Bonds can beat inflation, but there is zero guarantee. bonds except for the past 40-ish years have not even kept up with inflation. This is the rare occasional exception, alluded to earlier. Real Estate will probably keep up with inflation, and if you treat it like a real business, you might even make some money. Preferred stocks should beat inflation, but takes on considerably more risk than everything else above it, but after taxes you probably can make a little. Equities should handily beat inflation, risk is obviously higher. The safer the money, the less people are willing to pay you for it. There is no free lunch.
Not everyone has access to good MMF's. State tax exemption is another piece of the puzzle, and once you get past SIPC insurance levels of cash/cash like things, it mostly doesn't matter if you are in a MMF or not. Also, if you have funds across brokerages, something like SGOV can be nice since you can own it across all of your accounts, unlike most MMF's which are generally very specific to a particular brokerage. There is also USFR, ISCH, etc there are quite a bit of these cash-like ETF's out there.
Your shares are either sold and returned to you or transferred to another broker. Also, the first sentence on the SIPC website says that cash and stocks are protected. So I’m not sure where you got that from. https://www.sipc.org/for-investors/what-sipc-protects#cash Vanguard is owned by its customers. I don’t even use vanguard but I know it’s secure and reliable. There is still no difference in insured risk between someone’s ETF in Vanguard and your stocks. There is a greater risk in your single Tesla stock going to zero because of its rash founder.
So like you said, has nothing to do with what you previously said. SIPC is a false security.
I know how they make money. They have an expense ratios which they charge to hold their funds among other financial services. So like I said, for them to go under, they’d have to have a shit load of people pull their money out of those funds which could really only happen if people lose faith in the underlying companies. So like I said, a lot of companies would need to fail. That said, there’s SIPC which covers you up to 500k and I believe vanguard holds their securities separately from everything else so in the event vanguard goes under, the securities would be moved to another custodian.
Even if RH fails they don’t own your assets, so it is still going to be there for you to transfer to other brokerage. SIPC comes in only if RH was a complete fraud such as did not buy assets at all and just pocket your money, which is extremely unlikely. Even then the insurance covers up to 500k. There probably isn’t any case out there from modern times where investors lost their assets/cash from brokerage going under. US laws have made brokerage safety proofed, you can be worry free with any brokerage if you aren’t a trader.
Safety doesn’t matter, it is all covered under SIPC and FDIC. Robinhood gold also comes with other benefits, 3% contribution as well (not just transfer), 3% cc cashback, 5.25 apy cash sweep, etc. Any one of those benefits already outweight the $5 fees. Plus being able to match over the Roth limits is itself a feature.
why does it matter if I trust them? they’re SIPC insured AND Robinhood purchased additional insurance for its customers covering securities and cash up to $1 billion and cover each customer for $50 million in stock and $1.9 million in cash.
If you wife is paranoid to the point where she doubts the government, SIPC, Fidelity, and VOO/SPY split with some US LTTs then she has bigger issues and paranoia than could be easily dealt with by some diversification. If really REALLY believe that then you can "diversity" some of that cash into rural land, a bunker, food rations, and bullets. Go directly to ~~jail~~ spending money; do not ~~pass go~~ preserve wealth, do not collect ~~$200~~ dividends. Cause that's what you'll need when the inevitable collapse and nuclear-world-war-4 black-hole-swan super-pandemic zombie-apolocylpse great-great-great-depression-recession revolution comes.
The SIPC doesn’t protect the value of your investments. When RH fails to deliver you shares due to insolvency, the SIPC will just replace those shares at whatever mark-to-market it’s at and then laugh at you.
Robinhood is SIPC insured.
I use it too and I’ve seen several others in here. It’s superior to Robin Hood in terms of features. It pays 5% on cash in a cash management account with no fee for doing so. Good mobile app. Good signing bonuses. FDIC and SIPC insured. The downside is it’s Chinese owned.
RH can raise the price of Gold at any time. Also SIPC can take money months to resolve in the event of insolvency. 5 years is a long time for a bonus hold on my IRA funds. I decided not to do the deal, but it was a very tough decision.
Them holding your securities is fine. They are SIPC insured up to 250k. If you’re worried about solvency, transfer some holdings and “risk” to another broker.
Yeah I do think it's a good deal overall. Robinhood is desperate for customers so they're making some pretty attractive offers. Agreed though, let's just hope they don't rug pull. Btw, they automatically opt you into their stock lending program by default. You only earn 1% interest on any stocks that get loaned, and any loaned stocks are not insured in any way, SIPC or otherwise. If Robinhood goes out of business, you lose 100% of your loaned stocks. You can make your own decision on this one, but for me 1% yield is not worth a potential 100% loss, and Robinhood's financials are kinda shakey. I think they've gotten better with the crypto pump as crypto trading is something they depend a lot on to generate revenue as they stated when they IPO'd and I doubt they'll actually go out of business, but it's still not worth the risk to me at least. Also kinda shady that they default you to the lending program. I only found out because I got a message that some of my stocks got lent out. As soon as you opt out though, you get them back.
I have the 3%. You just gotta keep the funds with Robinhood for 5 yrs... I say go for it. People that have a problem with them complain about the meme event. If Robinhood goes bankrupt they'll either be bought by another broker and those accounts will be part of the brokerage or if they flat out go bankrupt you're insured up to 500k through SIPC. You can listen to other people about Robinhood but I know I'm insured. I am getting their credit card also which will give me 3% on everything as well. I'm not a huge Robinhood fan but the benefits are worth it.
The government normally steps in. Investments are usually insured up to 500k via SIPC.
What do you say to fearmongering that RH will collapse any minute and the IRA accounts they broker will fold. I don't think that's how it works. If RH is insolvent then whoever acquires the assets will broker those accounts. I don't think SIPC insurance is really relevant.
Several brokers offer similar programs - Fidelity’s cash management and retirement accounts are swept across 20 banks for $5m coverage, and next $500k swept to SIPC-covered money market fund. Their FDIC sweep currently pays a lower 2.72% APY, while the money market sweep is 4.96% APY. Taxable brokerage accounts are swept to money market only. You can also beat RH’s APY with many other HYSA providers without the RH Gold subscription fee, but don’t get a partner program for expanded FDIC coverage.
This is what Fidelity says on it's website: "Fidelity helps protect assets two ways: through FDIC insurance and SIPC coverage, depending on the type of account. Fidelity offers an FDIC-insured Deposit Sweep Program for certain account types: Cash Management health savings accounts (HSAs) and most IRAs. SIPC coverage protects assets held in brokerage accounts, including stocks, bonds, mutual funds, and money market funds." That's why I mentioned the FDIC but I did already know about the SIPC.
Well its SIPC that provides insurance for brokerage accounts not FDIC And SIPC is different vs FDIC; SIPC really covers "missing assets" So if you hold 1000 shares of VTI in your brokerage account and somehow those shares go "Missing"; SIPC will work to make sure you get 1000 shares of VTI back. It does not cover if VTI loses value that is just a legitimate investing loss SIPC does cover 250k of uninvested cash.
> I have several IRAs and 401Ks, one of my IRA accounts is sitting at Fidelity but it's over the FDIC limit and I'd like to pare it down to $200k, the other half I'd like to move to Robinhood because the FDIC will only protect one of each type per customer per bank and RH has a 3% bonus on where you deposit. Let's stop here because I believe you have a substantial misunderstanding of how insurance coverage works. Investment accounts generally do not receive FDIC coverage with some small exceptions (sometimes cash held inside an investment account). Investment accounts instead have SIPC coverage. And most large brokerages have additional insurance coverage above and beyond what SIPC covers. https://www.sipc.org It's important to understand what SIPC covers and the difference between banks and brokerages. With a bank, when you deposit your money the bank is entitled to mingle it together with other depositors and then lend it out to people. So if the bank were to experience a liquidity event, your money potentially isn't there because it's been lent out. But a brokerage doesn't do that. When you open an investment account and buy, for example, $200,000 in Apple stock, the brokerage is just a custodian and record keeper. Your Apple stock isn't being mingled with other peoples' Apple stock. If the brokerage were to completely fail and go out of business, your portfolio of Apple stock would just be moved to another brokerage. Broadly and simply speaking, what SIPC coverage protects you from is fraud. So if you go on Fidelity's web site and put in an order for $200,000 in Apple stock and they take your money and instead buy cocaine and hookers, you've been defrauded and SIPC insurance will step in and make you whole. I can all but guarantee you that Fidelity is not defrauding you. It is very, very common for people to have investment accounts in the six and seven figure range. There is simply no reason for you to try to spread around your investments to keep them under the FDIC limit. You are just adding unnecessary complexity. I hope this puts you at ease.
Yeah my only concern is if you have an account over SIPC limits and RH kicks the bucket
It depends on the size of your account. Like all brokers, the account values are insured up to levels depending on the broker's excess-of-SIPC insurance. Cyber-attacks also vary greatly. So - for attacks that target a broker's customers, you also have to practice some level of diligence like picking good passwords, not falling for spear-phishing, etc.
There's some custodial risk and SIPC insurance covers 500k per individual per account, but that's not a big one that keeps me up at night. There are some nice perks to having separate accounts (better loan rates, credit card bonuses / foreign fees, waived wire fees), and it's easy to track across accounts with an app. I don't like having bank connections to accounts, so I made [an app to track my investments](https://jch.app?s=i), but there are lots of options (previously, I used PersonalCapital) out there.
Unless your account is holding cash, when your broker goes bankrupt, you still own all the securities. When you sell, your broker isn't the one buying, so worrying that they won't have the money to cash out is unnecessary. So all your shares can just be transferred to another broker and life goes on. SIPC only protects cash and missing securities. And most brokers have extra coverage beyond the SIPC limit.
Right now, I hold stocks, etfs, etc with one broker, and have a HYSA at a different institution. I'm thinking of moving a big chunk of the money from HYSA to SNSXX for better returns (due to taxes) and easier management. It does feel like I'm keeping too much of my money in one account, but as long as I stay within the $500,000 limit for SIPC, this should be pretty safe right?
Anything invested is insured by SIPC, but that's only up to 500k.
I think that maybe you are very confused about how stock investing and share ownership works. First - what country are you in? The laws and regulations that govern the operations of a broker vary by country. In the US - the concept of an omnibus account is a normal occurrence and requirement for all brokers. That's how a broker separates customer funds from their own operating funds. So if a broker becomes insolvent or bankrupt, when regulators seize the business - the customer funds are separately held and can be recovered or transfered to another broker. Stock and share ownership is normally held in street name - that means that a custodian holds the shares of a customers and registers the ownership with a transfer agent. If the broker, custodian, or transfer agent goes bankrupt - management of the shares are simply moved to another company. In the US all brokers and custodians are required by law to be members of SIPC - this organization is an insurance mechanism that will fund the recovery of customer funds in the case of broker or custodial broker insolvency. Most countries also have regulators which mandate how much capital and collateral brokers must have to remain solvent and manage risk. If you are not in the US - countries like the UK, Canada, etc, have similar mechanisms. Tl;dr - you are focused on the wrong things when selecting a brokers - see the wiki here for some factors that you want to consider when selecting a broker - [https://www.reddit.com/r/investing/wiki/index/gettingstarted/#wiki\_how\_do\_i\_choose\_a\_broker\_to\_invest.3F](https://www.reddit.com/r/investing/wiki/index/gettingstarted/#wiki_how_do_i_choose_a_broker_to_invest.3F)
>People thought that was true with Madoff, and SBF, and others. Madoff was running an un-registered hedge fund, there is a reason you have to be an accredited investor to invest with a hedge fund because there is little to no oversight so you are expected to do your own due diligence SBF was running an off shore crypto exchange , and an offshore hedge fund You are really comparing apples to oranges here. Brokerages , ETFs, Mutual funds are pretty heavily regulated by a number of organizations FINRA, SEC, SIPC , independent auditors. Hedge funds or shady offshore exchanges might not be. Also Mutual funds/ETFs are basically their own company ; if Schwab goes bankrupt is cannot just confiscate shares inside SCHD/SCHX/SCHB and use it to pay their debts, because its not "their shares" the fund owns the shares
For the SIPC limit, my brokerage portfolio exceeds the limit, is the 250k for cash a separate limit? e.g. if I have 250k in cash and 500k in stocks in vanguard, It would protect 250k in cash and 250k in stocks? Though it might not matter that much. If vanguard goes bankrupt I have bigger things to worry about :P
Assets in a brokerage account are insured by [SIPC](https://www.nerdwallet.com/article/investing/sipc-insurance-what-it-does-and-does-not-protect) rather than FDIC.
>One thing I know is that if vanguard goes bankrupt the money wouldn't be protected like HYSAs but is that it? Most brokerages are covered by SIPC, similar-ish to that of FDIC for banks. Though, the key difference is that it doesn't protect your investments from going under based on market conditions, but will protect you if the brokerage itself that is holding your investments has issues. That is to say, if the US defaults on its credit, the world becomes a madmax movie, and VUSXX breaks the buck, SIPC will not pay you for lost value. However, if just Vanguard, as a brokerage goes bankrupt, your shares in VUSXX are protected. From the SIPC: >SIPC protects against the loss of cash and securities – such as stocks and bonds – held by a customer at a financially-troubled SIPC-member brokerage firm. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash. Most customers of failed brokerage firms are protected when assets are missing from customer accounts. There is no requirement that a customer reside in or be a citizen of the United States. A non-U.S. citizen with an account at a brokerage firm that is a member of SIPC is treated the same as a resident or citizen of the United States with an account at a SIPC member brokerage firm. >SIPC protection is limited. SIPC only protects the custody function of the broker dealer, which means that SIPC works to restore to customers their securities and cash that are in their accounts when the brokerage firm liquidation begins. https://www.sipc.org/for-investors/what-sipc-protects Also, it is important to note, since I just did my taxes, Vanguard doesn't report state tax exemption very clearly (at least for VFMXX), be sure your exemption is being applied correctly, I had to calculate mine manually using this guide: https://investor.vanguard.com/content/dam/retail/publicsite/en/documents/taxes/usgoin-2024.pdf.
Most brokerages have Roth IRAs where you can get the Bitcoin ETF though you would not have custody of the coins. Keep in mind that if you find an IRA that allows self-custody of bitcoin, it may not be SIPC insured. So when the service fails, you will lose your money.
move to Fidelity it has FDIC insurance (to protect your uninvested money un your core account) and the SIPC ( to protect your brokerage account)
Come on why not  Is your broker SIPC ? Which letter does it start with ?
BTC ETFs (which many house BTC on Coinbase) are SIPC-insured if I understand correctly. Owning BTC on Coinbase is not.
BTC ETFs good for SIPC insurance
You were able to resolve the issue with your bank. The purpose of the FDIC is simply to protect you when you can’t resolve the issue with your bank because they no longer exist. Investment companies aren’t included in the FDIC because your money is invested and investment involves risk whereas at a bank your money is a deposit and can’t lose value. They need to have different working because it can lose value and is still insured by the SIPC.
SIPC is better and pays back faster.
FDIC insurance protects you against bank failure, not hacks. Brokerages have a rough equivalent in SIPC insurance, but it’s less important because brokerages are not lending out your deposits to earn an interest spread, they are just investing them for you. So even if your brokerage fails, you still own the underlying securities, and in the event of a failure, there would be a process to have them transferred to a different brokerage.