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by quickthrowman 1967 days ago
Bank accounts are FDIC insured up to $250,000 each.

If your broker lends out your stock to short sellers, it will always return your shares, even if the short seller gets margin called and doesn’t have the money to pay back their broker.

I’m not sure what you mean by “index fund”, but securities/stocks are protected by SIPC insurance, up to $500,000 per account. You will get your stocks back if a brokerage fails.
1 comments
rootsudo 1967 days ago
A bank does not mean bank account, banks offer many different investment vehicles.

A savings or checking account is covered by FDIC. If your broker lends out your stock and can not recoup it, then you are also not protected by SIPC.

https://www.investopedia.com/terms/f/fractionalreservebankin...

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JumpCrisscross 1967 days ago
> If your broker lends out your stock and can not recoup it, then you are also not protected by SIPC

This is not true. The broker would be in default to you. If that literally pushed the broker under, SIPC would be there to pick up the pieces.

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