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<h4 class="dechead">On One Hand: SPIC Insurance
All brokerage accounts are insured by the SPIC (Securities Investors Protection Corporation), a government-run agency that has similar responsibilities as the FDIC does for bank accounts. According to CNBC.com, the SPIC insures brokerage accounts for up to $500,000 in missing funds. Cash, stocks, mutual funds and bonds are all covered.
On the Other: Investment Concerns
Since the United States economic collapse in 2007, you may feel insecure with a brokerage account, as some investment companies and banks have closed their doors, such as Merrill Lynch. During economic uncertainty, people tend to invest less out of fear that their money will disappear.
Bottom Line
Despite such valid concerns, the SPIC guarantees your brokerage account money for up to $500,000, even if your bank closes. CNBC.com recommends that you keep all of your brokerage account records, lest an error were to develop. This further guarantees the safety of your account.
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