SIE practice questioneasyFDIC vs SIPC
Which of the following distinguishes SIPC from FDIC insurance?
- ASIPC insures bank deposits; FDIC insures brokerage accounts
- BFDIC insures bank deposits against bank failure; SIPC protects brokerage customers against broker-dealer failure✓ Correct answer
- CFDIC coverage is $500,000; SIPC coverage is $250,000
- DBoth SIPC and FDIC protect against investment losses
Explanation
Why B — FDIC insures bank deposits against bank failure; SIPC protects brokerage customers against broker-dealer failure
FDIC insures bank deposits (checking, savings, CDs) up to $250,000 per depositor per bank against the bank's failure. SIPC protects brokerage customers' securities and cash (up to $500,000) against broker-dealer failure or insolvency. Neither protects against market losses. They cover different types of financial institutions: FDIC covers banks and thrifts; SIPC covers broker-dealers.
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