How the FDIC, SIPC, and NCUSIF are keeping your money safe

After the collapse of Silicon Valley Bank (SIVB) and Signature Bank (SBNY), and the spotlight on Charles Schwab (SCHW), First Republic (FRC) and others, we all know by now that the FDIC generally protects your bank deposits up to $250,000. Although, in the case of SVB and Signature, the feds are stepping in to make all depositors whole. Former FDIC Chair Sheila Bair explained on Yahoo Finance how the Federal Deposit Insurance Corporation works. But what if you have your money in a brokerage account or credit union?

We asked Bankrate.com Chief Financial Analyst Greg McBride. He says that if you have money in a brokerage account and the firm belongs to the Securities Investor Protection Corporation (SIPC) “then you’re covered up to $500,000 in losses in the event that the brokerage firm goes out of business.” McBride adds that “the SIPC does not protect you against investment losses. So if the value of your account's going to fluctuate. SIPC insurance doesn't protect you against that.”

If you have money on deposit at a credit union, and it’s federally insured through the National Credit Union Share Insurance Fund, it provides a similar backstop to the FDIC. McBride says “Before you put your money in a credit union, just make sure that they are protected by that National Credit Union Share Insurance Fund. Just like with a bank, you want to make sure you're putting your money in a place that's federally insured, but as long as that's the case, you are protected up to $250,000 just as you would by the FDIC at a bank.”

Key video moments

0:12 How your money is protected in a brokerage account

0:47 How you’re protected in a credit union