What is FDIC insurance?
The Federal Deposit Insurance Corporation (FDIC) is a U.S. government agency that insures cash deposits at FDIC member banks, generally up to $250,000 per account.1
What is eligible for FDIC insurance at Fidelity?
Fidelity's FDIC Insured Deposit Sweep Program (the "Program")
Cash balances in the Fidelity FDIC Insured Deposit Sweep Program are swept into an FDIC-Insured interest bearing account at one or more program banks and, under certain circ*mstances, a money market mutual fund (the "Money Market Overflow"). Deposits swept into the program bank(s) are eligible for FDIC Insurance, subject to FDIC insurance coverage limits. Balances that are swept to the Money Market Overflow are not eligible for FDIC insurance but are eligible for SIPC coverage under SIPC rules (referenced below).
The following Fidelity accounts utilize the Program:
- The Fidelity® Cash Management Account
- Certain eligible Fidelity retirement accountssuch as Traditional, Rollover, and SEP IRAs; Fidelity Roth IRAs, Fidelity SIMPLE IRAs
- Fidelity Health Savings Account
Brokered certificates of deposit (brokered CDs)
Fidelity offers investors brokered CDs, which are issued by banks for the customers of brokerage firms. These CDs are usually issued in large denominations and the brokerage firm divides them into smaller denominations for resale to its customers. Because the deposits are obligations of the issuing bank, and not the brokerage firm, FDIC insurance applies.
Fidelity's FDIC Insured Deposit Sweep Program details
In utilizing the Program, your uninvested cash balance is swept to a program bank where the deposit is eligible for FDIC insurance. If you have more than $245,000 in uninvested cash in your account, the Program will maximize your eligibility for FDIC insurance by allocating uninvested cash across multiple program banks. We currently have about 20 banks available for Fidelity Cash Management and IRA accounts (although new deposits at any point in time are subject to bank capacity limits). Assuming all the banks have available capacity, a customer could have up to $5 million of uninvested cash covered by FDIC insurance.2
The following links provide a current list of the program banks participating in the Program, based on the type of account:
- Fidelity® Cash Management Account Program Bank List
- Fidelity Individual Retirement Account (IRA) Program Bank List
- Fidelity Health Savings Account (HSA) Program Bank List
Please note that these lists may change over time as program banks are added or removed.
How the Program works
Fidelity automatically performs all transfers between your account and the program banks and provides anytime access to view the amount of cash at each program bank via Fidelity.com.
Each program bank will receive a maximum of $245,000 to help ensure that any accrued interest is also eligible for FDIC insurance (which has a $250,000 coverage limit). Any deposits over $245,000 will be systematically distributed across multiple available program banks.
For example, if $500,000 is deposited, $245,000 will be swept into each of the first two available program banks and the remaining $10,000 will be swept into a third. If a subsequent deposit of $50,000 is made, that will be deposited into that same third program bank.
Deposit amounts in excess of FDIC limits
The Money Market Mutual Fund Overflow component ("Money Market Overflow") of the FDIC Insured Deposit Sweep program, was added to the Program for deposit amounts in excess of FDIC insurance limits and/or Program limits.
This component provides for cash balances that are either greater than the FDIC Insured Deposit Sweep Program can place at the participating banks or exceed FDIC insurance limits, excess funds will be swept to the Fidelity Government Money Market Fund – Class S (
), also referred to as the Money Market Overflow fund. Once your funds are placed in the Money Market Overflow fund, these funds will be the first funds that are used to settle any debits to your account.
Please see the FDIC Insured Deposit Sweep Program Disclosure for more details.
