Safeguarding Your Accounts
Helping protect our customers' assets is an important part of our commitment to providing the best service possible.
What is FDIC insurance?
The Federal Deposit Insurance Corporation (FDIC) is a U.S. government agency that insures cash deposits at FDIC member banks, generally up to $250,000 per account.1
What is eligible for FDIC insurance at Fidelity?
Fidelity's FDIC Insured Deposit Sweep Program (the "Program")
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 circumstances, a money market mutual fund (the "Money Market Overflow"). Deposits swept into the program bank(s) are eligible for FDIC Insurance, subject to FDIC insurance coverage limits. Balances that are swept to the Money Market Overflow are not eligible for FDIC insurance but are eligible for SIPC coverage under SIPC rules (referenced below).
The following Fidelity accounts utilize the Program:
- The Fidelity® Cash Management Account
- Certain eligible Fidelity retirement accounts such as Traditional, Rollover, and SEP IRAs; Fidelity Roth IRAs, Fidelity SIMPLE IRAs
- Fidelity Health Savings Account
Brokered certificates of deposit (brokered CDs)
Fidelity offers investors brokered CDs, which are issued by banks for the customers of brokerage firms. These CDs are usually issued in large denominations and the brokerage firm divides them into smaller denominations for resale to its customers. Because the deposits are obligations of the issuing bank, and not the brokerage firm, FDIC insurance applies.
Fidelity's FDIC Insured Deposit Sweep Program details
In utilizing the Program, your uninvested cash balance is swept to a program bank where the deposit is eligible for FDIC insurance. If you have more than $245,000 in uninvested cash in your account, the Program maximizes your eligibility for FDIC insurance by systematically allocating this uninvested cash across multiple program banks. At a minimum, there are generally five banks available to accept customer deposits, making customers eligible for nearly $1,250,000 of FDIC insurance.2
The following links provide a current list of the program banks participating in the Program, based on the type of account:
- Fidelity® Cash Management Account Program Bank List
- Fidelity Individual Retirement Account (IRA) Program Bank List
- Fidelity Health Savings Account (HSA) Program Bank List
Please note that these lists may change over time as program banks are added or removed.
How the Program works
Fidelity automatically performs all transfers between your account and the program banks and provides anytime access to view the amount of cash at each program bank via Fidelity.com.
Each program bank will receive a maximum of $245,000 to help ensure that any accrued interest is also eligible for FDIC insurance (which has a $250,000 coverage limit). Any deposits over $245,000 will be systematically distributed across multiple available program banks.
For example, if $500,000 is deposited, $245,000 will be swept into each of the first two available program banks and the remaining $10,000 will be swept into a third. If a subsequent deposit of $50,000 is made, that will be deposited into that same third program bank.
Deposit amounts in excess of FDIC limits
The Money Market Mutual Fund Overflow component ("Money Market Overflow") of the FDIC Insured Deposit Sweep program, was added to the Program for deposit amounts in excess of FDIC insurance limits and/or Program limits.
This component provides for cash balances that are either greater than the FDIC Insured Deposit Sweep Program can place at the participating banks or exceed FDIC insurance limits, excess funds will be swept to the Fidelity Government Money Market Fund – Class S (FZSXX) , also referred to as the Money Market Overflow fund. Once your funds are placed in the Money Market Overflow fund, these funds will be the first funds that are used to settle any debits to your account.
Please see the FDIC Insured Deposit Sweep Program Disclosure for more details.
Fidelity’s government and U.S. Treasury money market funds will not impose a fee upon the sale of your shares, nor temporarily suspend your ability to sell shares if the fund's weekly liquid assets fall below 30% of its total assets because of market conditions or other factors.
What is SIPC?
The Securities Investor Protection Corporation (SIPC) is a nonprofit organization that protects stocks, bonds, and other securities in case a brokerage firm goes bankrupt and assets are missing.
The SIPC will cover up to $500,000 in securities, including a $250,000 limit for cash held in a brokerage account.
What Fidelity accounts are covered?
Excess of SIPC
In addition to SIPC protection, Fidelity provides its brokerage customers with additional "excess of SIPC" coverage. The excess coverage would only be used when SIPC coverage is exhausted. Like SIPC, excess protection does not cover investment losses in customer accounts due to market fluctuation. It also does not cover other claims for losses incurred while broker-dealers remain in business. For example, fraud claims would not be covered if the brokerage firm was still in operation. Total aggregate excess of SIPC coverage available through Fidelity's excess of SIPC policy is $1 billion. Within Fidelity's excess of SIPC coverage, there is no per customer dollar limit on coverage of securities, but there is a per customer limit of $1.9 million on coverage of cash awaiting investment. This is the maximum excess of SIPC protection currently available in the brokerage industry.
Both SIPC and excess of SIPC coverage is limited to securities held in brokerage positions, including mutual funds if held in your brokerage account and securities held in book entry form.
Investment assets not covered by SIPC
Certain assets are not eligible for SIPC protection. Among the assets typically not eligible for SIPC protection are commodity futures contracts, precious metals, as well as investment contracts (such as limited partnerships), and fixed annuity contracts that are not registered with the U.S. Securities and Exchange Commission under the Securities Act of 1933.
While the following investment products are not insured or eligible for FDIC, SIPC, or any specific coverage, Fidelity is proactive in keeping assets safe.
If you own Fidelity mutual fund shares directly, not through a brokerage account, your investment is in assets that are the property of the funds, not Fidelity. The funds and Fidelity are separate and distinct legal entities. The assets of each Fidelity fund are held by its custodian separate from any other assets belonging to Fidelity or any other fund. Neither Fidelity nor its creditors may access the funds' assets to satisfy financial obligations of Fidelity.
While SIPC and Lloyd’s of London protection applies to brokerage accounts, it does not apply to directly held mutual fund accounts.
Workplace retirement accounts
As a provider of recordkeeping services for workplace retirement plans, including 401(k)s and 403(b)s, Fidelity's services are governed by federal laws. These laws generally require retirement plan assets to be held in trust, segregated from the employer's or recordkeeper's assets. In most situations, when assets are held in trust, they are protected from creditors in the event that an employer or recordkeeper has financial problems.
For more information regarding the FDIC Insured Deposit Sweep program please see the following disclosures:
For Fidelity Cash Managment Accounts visit: Fidelity® Cash Management Account FDIC-Insured Deposit Sweep Program Disclosure
For the Retirement Account or Fidelity Health Savings Account, please go to: FDIC-Insured Deposit Sweep Program Disclosure