concerned about FDIC insurance limit?
 

I am currently using Zecco to buy my ETFs. I am approaching the 100k value with them which is what I believe is the limit for FDIC insurance. Should I be concerned enough to start another account with a different online broker even though it will cost me to trade (I estimate about 3 purchases/month but possibly more)? How does everyone else handle this issue?

Re: concerned about FDIC insurance limit?
 

What? Unless I'm missing something specific to Zecco, brokerage accounts aren't FDIC insured.

Re: concerned about FDIC insurance limit?
 

Perhaps he is thinking of SIPC -- http://www.sipc.org

Re: concerned about FDIC insurance limit?
 

They are not FDIC insured, but they are SIPC insured.

-Tom

Re: concerned about FDIC insurance limit?
 

You're right; I'm an idiot. So SIPC covers accounts up to 500k including 100k in cash. I assume by cash they are just talking about money in the account that isn't in a stock. If so that covers me for a while yet unless I'm cashing out everything to move it in which case it looks like I should try to keep less than 100k in cash at a time just in case it would happen to crash the same day I am moving it.

Re: concerned about FDIC insurance limit?
 

How do you like zecco?

Re: concerned about FDIC insurance limit?
 

[ QUOTE ]
If so that covers me for a while yet unless I'm cashing out everything to move it in which case it looks like I should try to keep less than 100k in cash at a time just in case it would happen to crash the same day I am moving it.


[/ QUOTE ]

What is this "it" you are worried about crashing? The entire US economy or your brokerage account?

Jimbo

Re: concerned about FDIC insurance limit?
 

If reach the 500k limit, I believe you could open additional accounts at different brokerages (ameritrade, scottrade, etc....) that should insure and additional 500k - 1mil per account.

Note: Unfortunately I do not have this problem yet, so I am not 100% certain that the SIPC works the same as the FDIC when it comes to spreading your funds across different institutions.

Re: concerned about FDIC insurance limit?
 

Jimbo,

I was referring to the brokerage going under. (Pure speculation) They might have to pay off investors before they pay off clients.

Re: concerned about FDIC insurance limit?
 

[ QUOTE ]
Jimbo,

I was referring to the brokerage going under. (Pure speculation) They might have to pay off investors before they pay off clients.

[/ QUOTE ]

While your investments are not insured, you are insured from your broker going under (up to $500k I believe it is at Zecco). They do not own your stocks, you do. If they go under, you still own those stocks. They don't sell your stocks on their behalf to pay their debts. That would be stealing.