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What Is SIPC Insurance?

April 26, 2017Insurance sipc

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What Is SIPC Insurance?

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The Securities Investor Protection Corporation—or SIPC—is a nonprofit membership corporation that was created by federal statute in 1970. Unlike FDIC insurance, SIPC does not provide blanket coverage. Instead, SIPC protects customers of SIPC-member broker-dealers if the firm fails financially. Coverage is up to $500,000 per customer for all accounts at the same institution, including a maximum of $100,000 for cash. When you think about it, this makes sense. After all, market losses are a normal part of the risk of investing. That is why SIPC does not protect you when the value of your investments falls. For more information about SIPC, go to SIPC.org.