So FDIC insures deposits up to 250k per person at each financial institution.
Let's say someone has X times 250k of cash, where X is anywhere between 2 and like 10, and they want minimum risk with this money. Would you tell someone where X = 10 to spread it out over 10 banks? What if X = 20? At what point does it become "ridiculous" when X is too large? I mean, having even more than 3 banks to deal with seems like a chore. More than 10 is like wth.
Let's say someone has a brokerage account with company ABC. They buy brokered CDs through ABC, each CD from a different institution. So in this case, if X is large, even though this person has put all their money into company ABC, would FDIC cover all X * 250k of the money? Same if instead of putting it all into X brokered CDs, they put it into a bunch of US government bonds? In other words, my question, generally, is how can you maximize the insurance for your securities even if you physically actually put all your money into just one brokerage company or bank account at this company ABC? (Addition, noob-ish question: If you buy US government bonds through a broker and let's say it's worth more than 500k (so it's more than what SIPC covers as well), and your brokerage company suddenly goes bye-bye, these bonds would be completely separate from FDIC coverage? All your bonds would still be good, right?)
AFAIK, SIPC insures investment accounts per person at each institution up to 500k (up to 250k of cash), but it's technically a weaker insurance than FDIC (from reading stuff on the web about it). Does that sound right? (Thus, to truly maximize safety, my above examples are trying to rely only on FDIC insurance.)
Thanks!
Submitted February 02, 2017 at 07:32PM by dasheea http://ift.tt/2knbMEh
