FDIC insured if the money is stored at a bank. Those are called brokered accounts. Not all sweep accounts use them and use money market funds or other secur

FDIC insured if the money is stored at a bank. Those are called brokered accounts. Not all sweep accounts use them and use money market funds or other securities. Also brokered accounts are fungible money can and does get transferred around behind the scenes. Some broker dealers will use the cash for overnight lending for income.