Security of Your Assets at Schwab

Security of Your Assets at Schwab

by Laurie Barrett on Mar 14, 2023

Schwab’s Banking Institutions

With the collapse of Silicon Valley Bank, worries surrounding your accounts at Schwab may be top of your mind.  Schwab is committed to staying financially independent, and we are confident in its ongoing financial health.  To address client concerns, Schwab published this on March 13th:

Regarding your cash holdings, Schwab Bank is FDIC insured.  Cash held or in a bank sweep would be the only part of a portfolio subject to any risk introduced by bank management and covered by the FDIC.  Included in the publication found at the above link but worth repeating:  80% of client cash is insured by the FDIC, among the highest of the top 100 U.S Banks.

Schwab’s Brokerage Business

Investments in the form of securities in accounts at Schwab are held in the investor’s name.  These assets are separate and not co-mingled with assets at Schwab’s Bank in accordance with the SEC’s Customer Protection Rule.  They are not available to general creditors and are protected against creditors’ claims.

In addition to FDIC insurance for the cash and bank sweep holdings, securities portfolios are covered by SIPC (Securities Investor Protection Corporation) for $500,000 and by additional insurance through Lloyd’s of London for an additional $150 million.  Schwab describes the details of both sources of that extensive coverage here:

Our Commitment to You

Protecting your assets is of the utmost importance to us.  We invest alongside our clients so the financial resources for our hopes and dreams are entrusted with Schwab, too.  We have complete confidence in their financial strength and commitment to maintaining that strength.