Financial Security: Account Protection | Why Fidelity (2024)

FAQs

What is a protection account Fidelity? ›

As part of our ongoing commitment to our customers, we're proud to offer our Customer Protection Guarantee: We will reimburse your Fidelity account for any losses due to unauthorized activity.

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.

All Fidelity brokerage accounts are automatically protected by the SIPC.

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.

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.

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.

Whether this makes Fidelity “too big to fail” or not is up for debate, as that term usually applies to banks instead of brokerage firms. However, it seems very unlikely that the US government would allow such a large and systemically important firm to fail in a worst-case scenario.

A Fidelity Cash Management account offers you ways to spend and save, plus all the features of a traditional checking account.

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.

How reliable are fidelity investments? ›

Fidelity says its execution quality on trades is 98.6%, putting it in the top tier of providers we've reviewed. Clients can also trade certain investments outside of traditional market hours.

FDIC insurance protects your assets in a bank account (checking or savings) at an insured bank. SIPC insurance, on the other hand, protects your assets in a brokerage account. These types of insurance operate very differently—but their purpose is the same: keeping your money safe.

If the value of your investments drops too far, you might struggle to repay the money you owe the brokerage. Should your account be sent to collections, it could damage your credit score. You can avoid this risk by opening a cash account, which doesn't involve borrowing money.

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.

Fidelity Data Breach Impacts More Than 28,000 Customers.

So what is a protection plan? It's essentially a payment break in the event of unforeseen income loss. Customers are charged a modest, recurring monthly cost which is determined by the amount borrowed and the conditions covered.

Protected Accounts means all customers and potential customers for the Products as are designated as such from time to time based upon the Manufacturer policy then in effect. Updated lists of Protected Accounts will be provided to Reseller throughout the Term of this Agreement.

Key Takeaways

If your company closes, you may have the option of rolling over 401(k) savings to a retirement plan with your new employer or to an individual retirement account (IRA). Whether you can keep all of the contributions your employer made to the plan will depend on the plan's vesting schedule.

Go to Fidelity.com/pws or call 800-343-3548. Use this form to establish, change, or delete an ongoing automatic withdrawal plan for a Brokerage or Mutual Fund Only Traditional, Roth, Rollover, SEP, or SIMPLE IRA account.