How Does Fidelity Protect My Investments (2024)

FAQs

How Does Fidelity Protect My Investments? ›

In accordance with SEC Rule 15c3–3, often known as the Customer Protection Rule, Fidelity protects client securities that are fully paid for by segregating them and ensuring that they are not used for any other purpose, such as for corporate investment purposes, loans to investors or institutions, or for spending.

Protecting your assets

With our Customer Protection Guarantee, we reimburse you for losses from unauthorized activity in your accounts. We also participate in asset protection programs such as FDIC and SIPC to help provide the best service possible. See our protection guarantee and account coverage.

Cash balances in the Fidelity FDIC Insured Deposit Sweep Program are swept into an FDIC-Insured interest bearing account at one or more program banks and, under certain circ*mstances, a money market mutual fund (the "Money Market Overflow").

If a brokerage fails, another financial firm may agree to buy the firm's assets and accounts will be transferred to the new custodian with little interruption. The government also provides insurance, known as SIPC coverage, on up to $500,000 of securities or $250,000 of cash held at a brokerage firm.

The SIPC will cover up to $500,000 in securities, including a $250,0002 limit for cash held in a brokerage account. All Fidelity brokerage accounts are covered by SIPC. This includes money market funds held in a brokerage account since they are considered securities.

They must also have a certain amount of liquidity on hand, thus allowing them to cover funds in these cases. What this means is that even if you have more than $500,000 in one brokerage account, chances are high that you won't lose any of your money even if the broker is forced into liquidation.

Fidelity is not a bank and brokerage accounts are not FDIC-insured, but uninvested cash balances are eligible for FDIC insurance. Balances above $5 million may be placed in a non-FDIC insured money market fund, which earns a different rate. See details in Learn more section below.

Fidelity Investments had another year of strong financial performance spurred by robust customer and account growth. The company had outstanding operating performance in each of its major lines of business—retail brokerage, wealth management, workplace benefits, asset management, and clearing and custody.

While Fidelity wins out overall, Vanguard is the best option for retirement savers. Its platform offers tools and education focused specifically on retirement planning.

Fidelity is generally better for lower account balances (accounts less than $25,000) and direct crypto exposure. Charles Schwab is better for higher balances and offers a more comprehensive selection of advanced charting tools like the thinkorswim platform.

Should I use Fidelity or Charles Schwab? ›

Overall Appeal. Fidelity and Schwab are both excellent choices. These investment firms offer thousands of funds. There are some nuances, such as Fidelity being better for crypto traders and Schwab being more optimal for futures traders.

Cash balances in the Fidelity^® Cash Management Account are swept into an FDIC-Insured interest bearing account at one or more program banks and, under certain circ*mstances, a money market mutual fund (the "Money Market Overflow").

Typically, when a brokerage firm fails, 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.

Fidelity takes your account balance and deposits it with various program banks to ensure that you maintain FDIC insurance for all your balances up to $5 million. It's possible that you may already have an account at a program bank, if so, this may affect your FDIC insurance on funds at that bank.

Fidelity Bank's unique combined insurance coverage afforded by the Federal Deposit Insurance Corporation (FDIC) and the Depositors Insurance Fund (DIF) provides the best deposit insurance available. Whether it's $100,000 or $10,000,000, every dollar you deposit with us is safe, secure, and 100% insured.

The Fidelity^® Debit Card is issued by PNC Bank, N.A., and the debit card program is administered by BNY Mellon Investment Servicing Trust Company.

Fidelity Customer Protection Guarantee

We're proud of the trust you place in Fidelity and want to ensure that you have peace of mind when doing business with us. That's why we offer this guarantee: We will reimburse you for any financial losses that result from unauthorized activity on your accounts.

The maximum you can request to withdraw from your account online or by telephone is $100,000 per account.

Covered Accounts are your Fidelity brokerage accounts, your Fidelity Crypto^SM accounts, and your Fidelity retirement plan accounts (e.g., 401(k), 403(b), 457, or profit sharing plans).