3 ms·

Apparently, SIPC doesn't provide blanket coverage[1]. So no coverage against, i.e. fire, flood, robbery or embezzlement [2]. The first 3 may not be relevant wi

by danans 8y ago

Apparently, SIPC doesn't provide blanket coverage[1]. So no coverage against, i.e. fire, flood, robbery or embezzlement [2]. The first 3 may not be relevant with digital bank that doesn't handle cash, but the last one might be. EDIT: I misread the second reference. apparently FDIC does not insure against theft or embezzlement, but according to the first link FDIC does provide blanket coverage unlike SPIC. it's still not clear to me what blanket coverage means in this instance. [1] https://www.schwabmoneywise.com/public/moneywise/essentials/understanding_fdic_and_sipc_insurance https://www.schwabmoneywise.com/public/moneywise/essentials/... [2] https://www.fdic.gov/consumers/consumer/information/fdiciorn.html https://www.fdic.gov/consumers/consumer/information/fdiciorn...

Someone1234 8y ago
Where did you get the "So no coverage against, i.e. fire, flood, robbery or embezzlement" claim from? It isn't in [1] or [2] and contradicts this: https://www.fool.com/investing/brokerage/2014/05/11/what-sipc-does-and-does-not-cover.aspx https://www.fool.com/investing/brokerage/2014/05/11/what-sip...
- intopieces 8y ago
  From your link: >SIPC does not protect customer funds placed with a broker-dealer just to earn interest. In this case, doesn't that mean the people who just use Robinhood has a checking / savings account aren't covered?
russell_h 8y ago
My understanding (which is limited, so someone please jump in if I'm wrong) is that SIPC does not protect against a decline in value of your assets. I'm wondering: First, whether Robin Hood is lending out deposits to margin traders. If not, what are they doing with the money? I don't think that they are, as the article implies, making > 3% on US treasuries. Second, if that investment loses money, are those losses passed on to account holders? If not, someone must be insuring that investment. Who?
- danans 8y ago
  > SIPC does not protect against a decline in value of your assets. Neither does FDIC, right? Still doesn't explain what FDIC "blanket" coverage offers that SPIC doesnt

by danans 8y ago

Someone1234 8y ago

Where did you get the "So no coverage against, i.e. fire, flood, robbery or embezzlement" claim from? It isn't in [1] or [2] and contradicts this: https://www.fool.com/investing/brokerage/2014/05/11/what-sipc-does-and-does-not-cover.aspx https://www.fool.com/investing/brokerage/2014/05/11/what-sip...

intopieces 8y ago
From your link: >SIPC does not protect customer funds placed with a broker-dealer just to earn interest. In this case, doesn't that mean the people who just use Robinhood has a checking / savings account aren't covered?

russell_h 8y ago

My understanding (which is limited, so someone please jump in if I'm wrong) is that SIPC does not protect against a decline in value of your assets. I'm wondering: First, whether Robin Hood is lending out deposits to margin traders. If not, what are they doing with the money? I don't think that they are, as the article implies, making > 3% on US treasuries. Second, if that investment loses money, are those losses passed on to account holders? If not, someone must be insuring that investment. Who?

danans 8y ago
> SIPC does not protect against a decline in value of your assets. Neither does FDIC, right? Still doesn't explain what FDIC "blanket" coverage offers that SPIC doesnt