Olde Hornet
Well-Known Member
http://www.usatoday.com/story/money...ent/2017/03/19/how-safe-is-your-ira/98952132/
IRAs get the same regulatory protection that applies to the investment vehicle you use to open your retirement account. For instance, if you invest your IRA in a bank certificate of deposit or savings account, then you'll receive interest in the same way that a regular banking customer would get, and your IRA will have the full protection of the Federal Deposit Insurance Corporation's $250,000 deposit insurance.
For those who use brokerage accounts to invest, the Securities Investor Protection Corporation offers protection of up to $500,000 for securities and cash, including a $250,000 cash limit. IRAs get the same protection as other brokerage accounts. But it's important to understand that while FDIC insurance actually protects your principal from risk of loss, SIPC insurance only protects you against problems with the brokerage company you use. When a broker gets into financial trouble and has to liquidate, SIPC makes sure the assets in each investor's account are present and accounted for. If cash or securities are missing, then the SIPC makes investors whole, up to the dollar limit protected.
What the SIPC doesn't do is to prevent you from suffering market losses. If you buy a stock and its value goes to zero, don't look to the SIPC to bail you out, because it won't.
IRAs get the same regulatory protection that applies to the investment vehicle you use to open your retirement account. For instance, if you invest your IRA in a bank certificate of deposit or savings account, then you'll receive interest in the same way that a regular banking customer would get, and your IRA will have the full protection of the Federal Deposit Insurance Corporation's $250,000 deposit insurance.
For those who use brokerage accounts to invest, the Securities Investor Protection Corporation offers protection of up to $500,000 for securities and cash, including a $250,000 cash limit. IRAs get the same protection as other brokerage accounts. But it's important to understand that while FDIC insurance actually protects your principal from risk of loss, SIPC insurance only protects you against problems with the brokerage company you use. When a broker gets into financial trouble and has to liquidate, SIPC makes sure the assets in each investor's account are present and accounted for. If cash or securities are missing, then the SIPC makes investors whole, up to the dollar limit protected.
What the SIPC doesn't do is to prevent you from suffering market losses. If you buy a stock and its value goes to zero, don't look to the SIPC to bail you out, because it won't.