Personal Finance & Estate › IRS, SSA, CMS & other agencies › Financial & consumer regulators
FDIC & SIPC (bank deposit and brokerage protection)
FDIC $250k; SIPC $500k· Agency
Law or rule (2026)Set by statute, regulation or the agency; numbers change yearly.
Federal backstops that repay depositors when an insured bank fails and restore customer assets when a brokerage fails.
See it on the Personal Finance & Estate map →How it works
The FDIC insures deposits at member banks up to $250,000 per depositor, per bank, per ownership category, such as single, joint, IRA or trust accounts. Since 2024, trust deposits get $250,000 per beneficiary, capped at $1.25 million per owner per bank. SIPC, a nonprofit funded by brokerages, restores missing cash and securities when a brokerage fails, up to $500,000 including $250,000 cash. Neither covers investment losses. Credit unions have parallel NCUA coverage.
Why it matters for you
Large cash balances, like a building's reserves or sale proceeds, can exceed limits at one bank; spreading across banks or ownership categories, or holding Treasuries, closes the gap.
Rules, limits and sources (2026)
The FDIC was created by the Banking Act of 1933, and no depositor has lost insured funds since; SIPC (1970) publishes records of every brokerage liquidation it has handled.
Watch out for
The 2023 Silicon Valley Bank rescue, which covered uninsured deposits too, left open whether large depositors can count on a bailout next time.
Connections (4)
▸FDIC & SIPC (bank deposit and brokerage protection) are the account backstops among Financial & consumer regulatorsLaw or rule (2026)
How they connect
Most regulators write rules or punish misconduct; the FDIC and SIPC pay when an institution fails. The FDIC also supervises many state-chartered banks, while SIPC only restores missing assets at failed brokerages. Neither protects against market losses, bad investments or fraud you authorized.
When it applies
The FDIC was created in 1933 after thousands of bank failures; SIPC followed in 1970 after a wave of brokerage collapses.
The rule
The Banking Act of 1933 and the Securities Investor Protection Act of 1970 created them; FDIC failed-bank lists and SIPC case records are public.
Watch out for
Whether the $250,000 limit, unchanged since 2008, is right, and whether business accounts deserve more, has been debated since the 2023 bank failures.
▸Emergency fund & cash (savings, CDs, money market) should stay within the limits of FDIC & SIPC (bank deposit and brokerage protection)Standard practice
How they connect
Emergency cash should be safe beyond doubt. FDIC insurance covers $250,000 per depositor, per bank, per ownership category, and trust accounts can reach $1.25 million per owner. Money market funds are not FDIC insured; SIPC protects up to $500,000, including $250,000 cash, only if a broker fails, not against market losses.
When it applies
FDIC created in 1933, SIPC in 1970. The 2023 Silicon Valley Bank failure showed the danger of large uninsured balances.
How sure?
12 CFR Part 330 sets FDIC coverage rules; the FDIC's online EDIE tool calculates coverage for specific accounts.
Watch out for
Whether the government would again cover uninsured deposits, as it did for SVB in 2023, is uncertain; fintech sweep accounts add risk.
▸Taxable brokerage account (individual, joint or trust) is covered against broker failure by FDIC & SIPC (bank deposit and brokerage protection)Law or rule (2026)
How they connect
If a brokerage fails and customer assets are missing, SIPC restores up to $500,000 per customer per ownership capacity (individual, joint, trust), including $250,000 cash. Customer securities are legally segregated, so most failures end in transfers to another firm. Cash in sweep programs may instead get FDIC coverage at partner banks. Market losses aren't covered.
When it applies
SIPC has handled more than 300 brokerage liquidations since 1970, including Lehman Brothers and Bernard Madoff's firm in 2008 and MF Global in 2011.
The rule
The Securities Investor Protection Act and the SEC's customer-protection rule (15c3-3) require segregation; SIPC annual reports list cases and recoveries.
Watch out for
'Excess SIPC' policies sold by large brokerages, privately insuring above $500,000, have rarely been tested in a major failure.
▸Revocable living trust can multiply bank-deposit coverage under FDIC & SIPC (bank deposit and brokerage protection)Law or rule (2026)
How they connect
FDIC insures trust accounts at $250,000 per owner per named beneficiary, up to five beneficiaries, so one owner can have $1.25 million covered at one bank; a couple naming three children can reach $1.5 million. SIPC has no such multiplier: it protects brokerage customers up to $500,000 against a broker's failure, not market losses.
When it applies
FDIC simplified its trust-account rules effective April 1, 2024, combining revocable and irrevocable trust deposits under one formula.
The rule
FDIC regulations at 12 C.F.R. Part 330 and its EDIE coverage calculator; SIPC limits come from the Securities Investor Protection Act of 1970.
Watch out for
Large balances still need spreading across banks; coverage for complex trusts with conditional beneficiaries is worth confirming with the bank and FDIC.