Skip to main content

Is Charles Schwab FDIC Insured?

Minho Investment Association| Updated: August 23, 2023

Charles Schwab is a financial services company that provides a range of services primarily focused on investing and personal finance. 

So, is Charles Schwab FDIC insured? 

No, Charles Schwab as a brokerage firm isn’t FDIC-insured. But here’s the catch: any uninvested cash (money you haven’t put into stocks or other investments) in your Charles Schwab account is FDIC-insured up to $250,000.

Throughout this article, we will examine Charles Schwab’s structure and how it affects investor protection regarding FDIC Insurance.

Is Charles Schwab FDIC Insured?

No, Charles Schwab as a brokerage firm isn’t FDIC-insured. But here’s the catch: any uninvested cash (money you haven’t put into stocks or other investments) in your Charles Schwab account is FDIC-insured up to $250,000. Think of it like this:

  1. Money just sitting there, not invested: FDIC-insured (safe up to $250,000).
  2. Money you’ve put into stocks, bonds, etc.: NOT FDIC-insured. It has a different kind of protection called SIPC protection(1).

So, while your investments aren’t covered by FDIC, your uninvested cash is.

Understanding FDIC Insurance

The Federal Deposit Insurance Corporation (FDIC) insurance stands as a cornerstone of financial security for depositors in the United States. This protection offers peace of mind by safeguarding your funds against potential bank failures.

In essence, FDIC insurance is a safety net for your deposits, covering a wide range of accounts, including savings, checking, and certificates of deposit (CDs).

The assurance extends up to $250,000 per depositor per bank, ensuring that a significant portion of your funds remains safeguarded even in the face of unexpected challenges.

It’s important to note that FDIC insurance applies exclusively to traditional banking products, not investments like stocks, bonds, mutual funds, or other securities. The coverage primarily pertains to cash deposits, ensuring that even if a bank faces financial difficulties, your hard-earned money is shielded up to the specified limit.

FDIC deposit insurance covers: FDIC deposit insurance does not cover:
Checking accounts Stock investments
Negotiable Order of Withdrawal (NOW) accounts Bond investments
Savings accounts Mutual funds
Money Market Deposit Accounts (MMDAs) Life insurance policies
Certificates of Deposit (CDs) Annuities
Cashier’s checks Municipal securities
Money orders Safe deposit boxes or their contents
Other official items issued by an insured bank U.S. Treasury bills, bonds, or notes
Crypto assets

A Closer Look: What Assets Are Truly Protected by FDIC Coverage?

FDIC insurance covers depositors’ accounts at each insured bank, dollar-for-dollar, including principal and any accrued interest through the insured bank’s closing date, up to the insurance limit.

Charles Schwab offers deposit accounts through Charles Schwab Bank, a subsidiary of The Charles Schwab Corporation. These deposit accounts are eligible for FDIC.

Therefore, our team has compiled all the products offered by Charles Schwab that are  protected by FDIC insurance. 

FDIC Insurance at Charles Schwab
Checking accounts (such as Schwab Bank Investor Checking™ accounts)
Savings accounts (such as Schwab Bank Investor Savings™ accounts)
Negotiable Order of Withdrawal (NOW) accounts
Money market deposit accounts (MMDA)
Certificates of deposit (CDs) (available through Schwab’s CD OneSource® marketplace)
Bank Sweep Feature2
Cashier’s checks, money orders, and other official items issued by a bank

On the other hand, FDIC insurance doesn’t provide coverage for financial products that fall outside the realm of deposits. These non-covered items include stock investments, bond investments, municipal securities, mutual funds, life insurance policies, the contents of safe deposit boxes, U.S. Treasury bills, exchange-traded funds (ETFs) and annuities.

Understanding Charles Schwab: A Closer Look

Charles Schwab is a well-respected name in the financial world, offering a variety of services to help you effectively manage and grow your wealth. 

At its core, Charles Schwab offers various services designed to assist you with your financial needs. You can open investment accounts to buy stocks or invest in funds like mutual funds and ETFs. They also offer retirement accounts and expert advice to guide your financial decisions.

Charles Schwab’s user-friendly websites and intuitive apps allow investors to easily manage portfolios, conduct research, and execute trades. Moreover, prioritising education and support, Charles Schwab offers a range of educational resources, including classes, guides, and webinars, ensuring you have the knowledge needed. Their accessible support team is also available to address any queries.


In summary, while not FDIC insured as a brokerage firm, certain products like Checking and Savings accounts under Charles Schwab enjoy FDIC coverage through associated banks. 

This detailed understanding helps us see how FDIC insurance keeps uninvested money safe and shows the difference between investments like stocks, bonds, and mutual funds that aren’t covered.

1SIPC (Securities Investor Protection Corporation) coverage safeguards funds invested in securities, such as stocks and bonds, in case of broker insolvency.

2Bank Sweep Feature—If the cash feature in effect for your Schwab brokerage account is the Bank Sweep Feature, your uninvested cash balances are automatically swept to one or more Program Banks where it is eligible for FDIC insurance

Minho Investment Association

The Minho Investment Association (MIA) is a junior initiative from the University of Minho (Portugal), which aims to promote financial literacy among young people.