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Coping in Tough Times: Is my brokerage account insured?


To submit a question, use the box on the right. I'll try to answer as many as possible here and every Wednesday in the newspaper in Your Money.

I’m told my brokerage account is insured by SIPC. What is that and what protections does it offer?

The Securities Investor Protection Corp., as many unfortunate investors have found out, does not insure you against losses in the market. There’s no insurance against fraud, either.
Only when a brokerage firm closes due to bankruptcy or other “financial difficulties” does SIPC step in to try to recover missing stocks, bonds or cash. It covers up to $500,000 in securities and $100,000 in cash.

Some brokerages have purchased private insurance for more than the SIPC limits, so check with your broker.

But if your brokerage does go under, be aware that SIPC doesn’t work as swiftly as the Federal Deposit Insurance Corp. And it doesn’t cover everything. Commodity futures and currencies, for example, are not covered.

Although it was started by Congress, SIPC is not a federal agency, and it is not a regulator. It is funded by its members, who are broker-dealers. For more info, go to www.sipc.org.

Categories: Coping in Tough Times (21)
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Who's the helpless idiot who asked this question? I googled "SIPC" and got the answser in about 10 seconds.


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About the author
You've got the job of managing your money. No one in school taught you how. But you and I, we can teach each other, how to handle it, how to save for retirement, how to make money last, how to educate the kids, how to make a budget work. The conversations I have with my readers are fun. Money's important, but discussing it does not have to be boring.

Harriet Johnson Brackey Harriet Johnson Brackey, the personal finance columnist for the Sun Sentinel, is an award-winning business reporter. Her columns for 2008 were named "The Best in the Business," a national award chosen by her colleagues at the Society of American Business Editors and Writers.

Brackey has worked at Business Week magazine and at USA TODAY, where she was a founder and part of the original staff of the Money section at the country's first national newspaper. After nearly 11 years there - spent covering the 1980s bull market, the insider trading scandals, the 1987 crash - Brackey left Washington, D.C., and came to The Miami Herald. She spent the next decade writing a column about personal finance that chronicled the stock market's Internet boom and bust, as well as the popular Money Makeover features.

Brackey also has done commentaries for Marketplace Money, which airs on National Public Radio and The Nightly Business Report which is broadcast on more than 250 PBS television stations nationwide. She also has been a radio guest on WLRN’s Miami Herald News.
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