FDIC insurance and investments

[Hornbeliever 718]

A friend has a few accounts at or around $300k, above the $250k threshold. 

 

At what point do y'all get yet another new account or just wing it and keep going to $500k or more?  

[Guest Lobo]

big misconception.  It's not about who owns the accounts/who deposits the money.  It's how the accounts are titled.  

You can easily fill up $250k in an individual account and then another $250k in JTWROS or JTTIC.  or start a trust for a few bucks in administration per year to protect another individual account.  Usually someone asking about stuff like this is a cry for help for people to notice that they have $300k in cash.  Maybe it's a sweep account.  Maybe it's a way to hide cash from his wife.  Either way, it's about title not individual identity.  

[Hornbeliever 718]

So people with $2 million in stocks have 8 separate accounts with some slight differentiation?   Just getting a pulse of what people out there do. 

[TwiceHorn 31678]

People with $2 million in stocks aren't insured by FDIC.  People with $2 in stocks aren't insured by FDIC.  SIPC insures brokerage accounts.

FDIC only insures "cash" deposits at FDIC-insured banks.  And it's only against bank failure.

Currently, if you have 250k in a bank, you are losing money.

Edited October 9, 2018 by TwiceHorn

[Reagan1k 3026]

If I may, I'll expand even a little further on what TwiceHorn has said about SIPC coverage on a brokerage account.

It does not protect against a loss or decline in value of any security (stock, bond, mutual fund, money market fund, tulip, or bitcoin)

Think of it as replacement insurance in the event a brokerage firm went poof and your stocks went missing.  (the broker is just a custodian if you will).

The SIPC will work to restore the asset that the custodian "lost", but that has nothing to do with the value of security.

FDIC protects you against bank failures.

SIPC protects you against brokerage firm failures - not against market declines.

[luke duke 6420]

So people with $2 million in stocks have 8 separate accounts with some slight differentiation?   Just getting a pulse of what people out there do. 

[Hornbeliever 718]

Dude, that is sooooo funny.  Appreciate the help in the help forum. 

[Guest Lobo]

You said "a few" accounts near $300,000.  I'll take that to mean maybe 4.  That's $1.2mm.  That's 5 FDIC insurable accounts.  He needs one in his name, one JTIC, one JTWROS, one in his wife's name, and one in a named trust.  No, people don't have 8 stock accounts.  Got it?  

[elfenix 34385]

if your friend has that much money he should pay someone to tell him how to protect it rather than getting you to run to a bunch of sarcastic assholes for 'advice'

[happyfunball 481]

52 minutes ago, elfenix said:

if your friend has that much money he should pay someone to tell him how to protect it rather than getting you to run to a bunch of sarcastic assholes for 'advice'

i put all my money in ameros as those are fully protected.

[Texas St. Armadillos 1381]

I would put half in mutual funds and then take the other half over to my friend Asadulah who works in Securities.

Edited October 12, 2018 by Texas St. Armadillos

[Hornbeliever 718]

Ameros? Can you give me more detail please.  If they're fully protected, that sounds amazing and I'd like to learn more.