Is Vanguard FDIC Insured?
Vanguard has SIPC insurance, but it does not have FDIC insurance. Here are the details:
Vanguard only offers brokerage accounts. It does not provide bank accounts such as checking or savings accounts.
The FDIC only insures bank accounts, so Vanguard does not offer FDIC protection.
Every brokerage account at Vanguard is protected by SIPC. The coverage limit is $500,000. Up to $250,000 of this amount can apply to uninvested cash.
Calculating SIPC Coverage at Vanguard
SIPC insurance usually applies per customer, per brokerage firm. This means you can increase coverage by holding accounts at different brokers, but not by opening multiple accounts at the same broker. There are some exceptions to this rule.
For example, under SIPC rules, IRAs have separate coverage from taxable accounts. Roth IRAs are also insured separately from Traditional IRAs.
If you have two IRAs at Vanguard (one Roth and one Traditional) and two taxable individual accounts, you would have a total of $1.5 million in coverage. The retirement accounts would have $1 million in protection ($500,000 for the Roth and $500,000 for the Traditional), and the taxable accounts would have another $500,000 total (not $500,000 for each).
But if one of the taxable accounts is a joint account, it would have its own $500,000 limit, bringing the total taxable coverage to $1 million.
Vanguard And Top Competitors
Money Market Settlement Fund
Vanguard uses a money market mutual fund as the core position for every brokerage account. This means that any uninvested cash in an account is automatically moved into a money market fund. Vanguard refers to this fund as the settlement fund.
Because the settlement fund is treated as a security, it receives $500,000 of SIPC coverage instead of $250,000. It is not counted as cash, even though it works like cash, and the fund’s NAV normally stays at $1.00.
At this time, Vanguard’s Federal Money Market Fund is the only settlement fund available to serve as a brokerage account’s cash position.
Account Example
To show how SIPC protection works at Vanguard, imagine you have a taxable brokerage account with $600,000 in assets. The portfolio is divided as follows:
$230,000 in Tesla stock
$70,000 in GLD, the gold ETF
$300,000 in VMFXX, the settlement fund
In the unlikely event that Vanguard went bankrupt and account holdings were missing, the full account would not be covered by SIPC. Only 83.3% of the account would be protected ($500k/$600k). The entire settlement fund, not just $250,000, would be covered, but $100,000 of the account value would remain unprotected by SIPC.
Keep in mind that the assets in your account legally belong to you, not Vanguard, so if Vanguard ever went bankrupt, creditors could not take your assets. SIPC protection exists in case any holdings go missing, which can happen in rare situations.
Supplemental Insurance at Vanguard
Vanguard also has extra insurance through Lloyd’s of London and London Company Insurers. This adds another layer of protection to a brokerage account, but only after SIPC coverage has been used.
The extra insurance covers up to $49.5 million per account, with a total limit of $250 million across all accounts. This means the policy will pay out no more than $250 million in total if many accounts reach their SIPC limits.
Returning to the example above, the $100,000 that was not covered by SIPC should be covered by the extra insurance, assuming the overall limit has not been reached. Beyond that point, no further protection is guaranteed.
Updated on 1/7/2026.
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