SIPC
SIPP INDUSTRIES INC NEW
stockOTC

SPAXX is a Money Market fund paying 3.44%…..no MM fund (anywhere) is FDIC protected. However, SPAXX is SIPC protected up to twice the amount of your bank account. There is no fear from potential failure. Plus…all the other features offered by Fidelity makes this the smart choice for a checking account.

Your SPAXX shares are SIPC insured up to $250k in value, and SPAXX itself is a money market mutual fund designed to maintain a $1 NAV and which invests almost entirely in ultra-safe U.S. government securities. It contains zero stocks whatsoever. Would sleep as soundly with hundreds of thousands of dollars in a Fidelity CMA with SPAXX as its core position as in an FDIC insured bank or NCUA insured credit union. Though I do prefer FDLXX to SPAXX because it invests almost exclusively in U.S. Treasury securities, gains from which are exempt from state and local income taxation and which are arguably a touch safer. The more painful part about the CMA isn’t at all the safety of SPAXX or the nuances between FDIC vs NCUA vs SIPC coverage (remember Fidelity is also an utterly gargantuan company), but rather just the lack of Zelle and the distinction between what brokerage branches can do vs what bank and credit union branches can do. Having a Fidelity branch next to you does *not* mean you’ll have access to cash and checks the way that a Chase account user with a Chase branch next to them would.

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Others covered the dividend tax part well. A few other things that are in the fine print and worth knowing before you decide: - While shares are on loan, SIPC protection may not cover them. Robinhood puts up cash collateral (aiming for at least 100% of the value) at a third-party bank instead, so if the broker failed you'd be relying on that collateral rather than SIPC. - You can still sell whenever you want, the loan just gets recalled. What you do lose while they're lent out is your shareholder vote. - How much you earn depends on how in-demand your stock is for short sellers. Common stuff like big ETFs or Apple pays close to nothing. The stocks that pay noticeably more are usually hard-to-borrow, heavily shorted names, which is a useful signal in itself. - You split the lending income with the broker, so your cut is smaller than what the borrower pays. So it's not a scam, but for a small beginner portfolio the money is tiny, and the dividend tax issue can cancel it out. It's fine to leave it off and revisit later. You can turn it on or off in the settings anytime.

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Yes, but “the firm” you reference is the brokerage failing, not the ETF holding company. SIPC protects you if your brokerage goes under.

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SIPC protects customer securities—including stocks, bonds, mutual funds, and ETFs—held at a member brokerage if the firm fails and your assets are missing. (Up to $500,000). So since it’s an ETF, I believe this would qualify. Provided the brokerage is a SIPC member.

I believe your referencing SIPC insurance... And no it doesn't cover you if Coinbase loses black rocks IBIT Bitcoin

You're right that the bank and brokerage rules don't apply. Crypto at Fidelity isn't covered by FDIC or SIPC. The protection comes from how they hold it. About 98% sits offline in cold storage, in shielded vaults across multiple sites. Moving any of it takes multiple signatures and approval from more than one person, so there's no single point of failure. They don't use outside custodians or exchanges like Coinbase, and they don't lend out client assets, which is what wiped out FTX customers. So it's not a government guarantee. It's Fidelity's own custody controls. The real weak spot is persoonal login

SIPC is not federal insurance. They are a non-profit**,** member-funded corporation, anointed by Congress comprised of most broker/dealers in the US.

I think you lack basic understanding of how cypto firms like binance and brokerage accounts from fidelity work. Cyptos are instant exchange with instant transfer hence high risk. Stocks are not instant exchange. You have to sell and clear the transaction through clearing settlement house and then transfer the money through ach or wire to a bank account. On top of that there is actual federal insurance backdrop like SIPC. There is also money transfer lock in security setting. Maybe go do some research first.

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Personal self custody certainly but at some point it does have to be stored. Look at what Ledger is going through, or even Binance. At least Schwab or Fidelity have SIPC insurance if they get hacked or lose the coins otherwise.

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To start, my stocks in a broker are federally insured through SIPC, good luck to those who lost coins in Binance and to those who will lose them in the inevitable next big hack