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Is Fidelity FDIC Insured? The Best Understanding Of the Insurance Coverage

fidelity's fdic status

When it comes to managing our finances, it’s crucial to understand the safety nets that protect our hard-earned money. 

Fidelity, a leading financial services company, offers a range of banking and investment options. 

But, is Fidelity FDIC Insured?

In this article, we’ll delve into the details to determine whether Fidelity is FDIC insured, and explore the importance of this coverage.

What is FDIC Insurance?

The Federal Deposit Insurance Corporation (FDIC) is an independent government agency that guarantees the safety of deposits at participating banks and savings associations. In case of a bank failure, the FDIC ensures that depositors’ money, up to certain limits, will be protected.

Is Fidelity FDIC Insured

Is Fidelity FDIC Insured? (The Truth)

If you have been wondering whether Fidelity is FDIC insured, the short answer is yes, but it’s important to understand how FDIC insurance works with Fidelity’s brokerage accounts. 

While Fidelity is not technically a bank itself, Fidelity Bank, FSB, a division of Fidelity Investments, is an FDIC-insured bank, under Program Bank regulations. 

This means that the uninvested cash balance in your Fidelity brokerage account is eligible for FDIC protection under Fidelity’s Deposit Sweep Program, which channels the cash into banks that carry FDIC insurance.

It’s worth noting that only a portion of the cash balance may be eligible for FDIC coverage, depending on the Deposit Sweep Program option selected by the account holder. 

For example, Fidelity Cash Management Accounts, most IRAs, and health savings accounts (HSAs) are eligible for FDIC insurance coverage for the entire balance held in the account.

Fidelity’s FDIC Insurance Coverage:

Fidelity, a well-known financial services company, offers a wide range of services, including banking accounts and brokerage services. 

However, it’s important to understand the distinction between Fidelity as a bank and Fidelity as a brokerage firm to fully grasp its FDIC insurance coverage.

Fidelity as a Bank vs. Fidelity as a Brokerage Firm:

While Fidelity operates primarily as a brokerage firm, it also provides certain banking services. Fidelity’s banking services include checking and savings accounts, certificates of deposit (CDs), and money market accounts. 

These accounts are offered through Fidelity’s affiliate bank, Fidelity Brokerage Services LLC, Member NYSE, SIPC, referred to as the Program Bank.

stock market

Fidelity’s Deposit Sweep Program:

To provide FDIC insurance coverage for its banking customers, Fidelity uses a mechanism called the “Deposit Sweep Program.” 

This program involves automatically sweeping uninvested cash balances in eligible Fidelity accounts into deposit accounts at one or more Program Banks that participate in the FDIC’s Deposit Insurance Program.

By participating in the Deposit Sweep Program, Fidelity customers can benefit from FDIC insurance coverage on their eligible banking deposits. 

This program allows Fidelity to offer expanded FDIC coverage by spreading deposits among multiple banks.

Limitations and Exclusions to FDIC Insurance Coverage at Fidelity

While Fidelity’s Deposit Sweep Program offers FDIC insurance coverage to eligible customers, there are limitations and exclusions to be aware of. 

Firstly, it’s important to note that not all Fidelity accounts are eligible for the Deposit Sweep Program and, therefore, may not be covered by FDIC insurance.

Additionally, FDIC insurance does not cover losses due to market fluctuations or the value of investments held within Fidelity brokerage accounts. 

Investments in stocks, bonds, mutual funds, and other securities are subject to market risks and are not protected by FDIC insurance.

Comparison of Fidelity’s FDIC Insurance Coverage with Other Institutions:

Fidelity’s approach to FDIC insurance coverage is similar to other financial institutions that provide both banking and brokerage services. 

However, the specifics of each institution’s coverage can vary, so it’s important to review the terms and conditions for FDIC insurance offered by different banks.

When comparing Fidelity’s FDIC insurance coverage with other institutions, it’s crucial to consider factors such as the number of participating banks in the Deposit Sweep Program, the total coverage limits offered, and any additional protections provided by the institution.

By understanding the intricacies of Fidelity’s FDIC insurance coverage, customers can make informed decisions about their banking and investment needs. 

While FDIC insurance provides a safety net for eligible deposits held at Fidelity, it’s essential to consider the overall portfolio and any additional protections that may be necessary for investments and assets beyond the scope of FDIC coverage.

Eligibility for FDIC Insurance at Fidelity:

Fidelity offers FDIC insurance through its Deposit Sweep Program. This program takes a customer’s uninvested cash balance and “sweeps” it to one more more accounts at its partner banks. Those accounts are FDIC insured. Thus, this program provides deposit insurance for that uninvested cash.

Therefore, Fidelity customers can potentially have deposits insured up to the maximum FDIC coverage limits.

Understanding FDIC Insurance Limits at Fidelity:

FDIC insurance coverage is an important safeguard for depositors, protecting them in case of bank failure. 

However, it’s important to understand the coverage limits that apply to different types of accounts and ownership structures. 

Here’s a breakdown of the FDIC insurance coverage limits for Fidelity accounts.


Coverage Limits for Different Types of Accounts:

Fidelity offers a range of banking services, including checking, savings, money market accounts, and certificates of deposit (CDs). Each account type has its own limit for FDIC insurance coverage.

For individual accounts, the current coverage limit is $250,000 per depositor, per bank. 

This means that if you have multiple individual accounts with different Fidelity program banks, you can potentially qualify for higher coverage. Joint accounts have the same coverage limit of $250,000 per eligible owner, per bank.

For example, if you have an individual checking account with a balance of $200,000 and a joint savings account with your spouse with a balance of $300,000, the total combined coverage for these accounts would be $750,000 ($250,000 for the individual account and $500,000 for the joint savings account).

Distinction between Single Ownership and Joint Accounts:

It’s important to understand the distinction between single ownership and joint accounts when it comes to FDIC insurance coverage. 

For single ownership accounts, coverage is based on the individual account owner’s balance, while for joint accounts, coverage is based on the number of co-owners in the account.

For example, if you have a joint checking account with your spouse, the account would be covered up to $500,000 ($250,000 x 2).

FDIC Insurance Coverage for Retirement Accounts and 401(k) Plans:

In addition to traditional banking services, Fidelity also offers retirement accounts such as individual retirement accounts (IRAs), Roth IRAs, and 401(k) plans. 

As with other accounts, FDIC insurance coverage limits apply to eligible deposits within these accounts.

However, it’s important to note that for retirement accounts, the $250,000 FDIC limit applies to all deposits across different account types within the same bank and for the same account owner. 

For example, if you have a Traditional IRA and a Roth IRA with the same Fidelity program bank, the $250,000 limit applies to the combined balance of both accounts.

FDIC Insurance Coverage Limits at Fidelity: A Summary

The following table summarizes the FDIC insurance coverage limits for Fidelity accounts:

Account Type

Coverage Limit

Individual Account

$250,000 per depositor per bank

Joint Account

$250,000 per eligible owner per bank

Retirement Account

$250,000 per account owner per bank

Note that the FDIC provides coverage up to $250,000 per qualified account holder, per account type, per bank. Eligible deposits include checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs).

By understanding the FDIC insurance coverage limits that apply to different Fidelity accounts, depositors can make informed decisions and take appropriate actions to protect their deposits.

Benefits and Risks of FDIC-Insured Accounts at Fidelity:

FDIC insurance offers several advantages, including peace of mind, protection against bank failures, and ease of access to funds. 

However, it’s essential to recognize its limitations. For high-net-worth individuals or those with account balances exceeding $250,000, a comprehensive assessment of additional account protection options is recommended.


Frequently Asked Questions:

Is Fidelity FDIC insured for brokerage accounts?

Yes, though FDIC insurance primarily covers Fidelity’s banking accounts, brokerage accounts held through Fidelity are protected by the Securities Investor Protection Corporation (SIPC) up to certain limits.

Can I have both FDIC and SIPC insurance with Fidelity?

Yes, if you have both banking and brokerage accounts with Fidelity, you can benefit from FDIC insurance on your eligible banking deposits and SIPC coverage on your eligible brokerage accounts.

What happens if Fidelity becomes insolvent?

FDIC and SIPC insurance are designed to protect customers in the event of a bank or brokerage failure. If Fidelity were to become insolvent, these insurance programs would provide coverage to eligible depositors and investors.

Is FDIC insurance the only protection for investments at Fidelity?

While FDIC insurance offers protection for bank account deposits, it’s important to understand that investments in stocks, bonds, mutual funds, and other securities held within Fidelity accounts are not covered by FDIC insurance. These investments are subject to market risks.


As you navigate the world of financial services, understanding the scope of FDIC insurance and its application to Fidelity is crucial. 

While Fidelity does offer FDIC insurance coverage for its banking accounts, it’s essential to consider additional protections for your investments.

Consulting with a financial advisor can help you evaluate your specific needs and develop a comprehensive strategy for safeguarding your money.