A lot of us probably remember the GFC and the fallout of large financial institutions going under. With this somewhat traumatic memory in my mind I was curious to know exactly how much of my assets(stocks) that are sitting in my TD Ameritrade account are insured in one way or another. Here’s what I found:
1) Cash ‘may’ be covered by the FDIC up to 250k. The language on this was a little opaque so I’d call them to confirm if I wanted to know for sure.
2) CDs purchased through TD are covered by the FDIC.
3) Securities are covered by the SIPC up to 500k.
4) TD has a supplemental insurance policy that claims to protect customers up to 149.5 million for securities and 2 million for cash. The big caveat here is the aggregate limit for this policy is a measly 500 million.
This won’t be an issue for most people (myself included) but I thought it was interesting to see how the 12 million customers with 1.2 trillion worth of assets at TD are insured in the worst case scenario. It seems like those with over 500k in assets with TD might be exposed given some crazy event that leads to insolvency.
I don’t think insolvency is going to happen, but its worth knowing your exposure.
Food for thought!