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Is TD Ameritrade FDIC Insured?

Minho Investment Association| Updated: August 29, 2023

TD Ameritrade is one of the oldest stockbrokers in the USA, offering an electronic trading platform for trading financial assets.

In this article, we examine TD Ameritrade’s structure and how it affects investor protection regarding FDIC Insurance. With this understanding, you’ll be equipped to make informed investment decisions, grasping the boundaries and benefits offered by TD Ameritrade and FDIC insurance.

Is TD Ameritrade FDIC Insured?

No, TD Ameritrade is not a bank but a brokerage firm. As such, TD Ameritrade’s accounts are not FDIC-insured.  However, TD Ameritrade cash management accounts are eligible for FDIC insurance coverage. 

So, technically, TD Ameritrade is not under the FDIC, but your money is protected, in practice, since it uses FDIC insurance banks to deposit it.

Think of it like this:

  1. Money just sitting there, not invested: FDIC-insured, safe up to $250,000 (per member, per bank);
  2. Money you’ve put into stocks, bonds, etc.: NOT FDIC-insured. It has a different kind of protection called SIPC protection1 (covered up to $500,000)

Understanding the distinction between FDIC-insured accounts and other investment products is paramount. While FDIC insurance guarantees the safety of uninvested cash in your Interactive Brokers brokerage account, other investments like stocks, bonds, and mutual funds fall within the SPIC protective coverage.

TD Ameritrade Cash Management Account

The TD Ameritrade Cash Management Account merges a traditional checking account with a brokerage account. This account offers investors the opportunity to earn interest on uninvested cash balances while also providing access to short-term investment options.

The TD Ameritrade Cash Management Account has a distinctive approach to insurance coverage. Uninvested cash balances within the account are held in an FDIC-Insured interest-bearing account at designated program banks. While cash deposits at these program banks are FDIC insured up to the prescribed coverage limits, funds directed to the Money Market Overflow might not have FDIC insurance coverage. However, these funds could potentially still be eligible for SIPC coverage under SIPC rules.

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

Understanding TD Ameritrade: A Closer Look

TD Ameritrade is a well-known securities brokerage and a notable name in the financial world, offering a large variety of services, such as:

  • Online Trading Platform: It offers an intuitive and customisable trading platform that allows investors to execute buy and sell orders for financial assets;
  • Research and Education Tools: It provides a range of research tools, market analysis, and financial education to help investors make informed decisions;
  • Access to Various Markets: TD Ameritrade clients have access to a wide range of financial markets, allowing them to trade stocks of publicly listed companies, options, bonds, mutual funds, ETFs, futures and foreign currencies;
  • Investment Accounts: It offers different types of investment accounts, such as individual accounts, joint accounts, retirement accounts (IRAs), and trust accounts;
  • Technical Analysis Tools: Investors can use technical analysis tools to examine price charts, technical indicators, and market patterns, helping to identify trends and trading opportunities.
  • Mobile Platform: It also provides mobile apps for smartphones and tablets, enabling investors to monitor their investments and execute trades from anywhere.


In summary, TD Ameritrade, a prominent brokerage firm, does not offer FDIC insurance coverage for its accounts since it’s not a bank. However, its cash management accounts do provide FDIC coverage for uninvested cash balances by utilising designated program banks. This safeguards these funds up to $250,000 per depositor per bank, ensuring a level of security.

TD Ameritrade excels as a comprehensive securities brokerage, offering diverse services like an intuitive trading platform, market research, and access to various financial markets. While it doesn’t extend FDIC protection to all accounts, its cash management accounts leverage FDIC-insured accounts for uninvested cash, enhancing the safety of investors’ funds.

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

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.