Is my Invest account protected by SIPC?
Summary
Yes. Your nsave Invest account is opened with Alpaca Securities LLC, a US broker-dealer and member of FINRA and SIPC. If Alpaca were to fail, SIPC protects the securities and cash in your account up to $500,000, including up to $250,000 in cash. Alpaca also carries additional (excess SIPC) insurance above these limits.
What is SIPC?
The Securities Investor Protection Corporation (SIPC) is a US non-profit organisation that protects customers of member brokerage firms if the firm fails financially and customer assets are missing. It covers you whatever your nationality or country of residence. Non-US customers get the same protection as US customers.
How much is covered?
| Protection | Limit |
|---|---|
| SIPC: securities and cash combined | Up to $500,000 per customer |
| SIPC: cash (uninvested buying power) | Up to $250,000 of the $500,000 |
| Excess SIPC (Lloyd's of London), above SIPC limits | Up to $75 million in securities and $75 million in cash per customer, subject to a $250 million aggregate limit across all Alpaca customers |
What isn't covered?
- Market losses. SIPC and excess SIPC don't protect you if the value of your investments falls.
- Money outside your Invest account. Funds in your nsave USD or GBP accounts aren't held at Alpaca and aren't covered by SIPC. They're protected through safeguarding instead (see below).
- Bad investment advice or unauthorised account access. SIPC covers missing assets when a brokerage fails, not fraud on your account or poor investment decisions.
- Certain asset types. These include commodity futures, foreign currency trades and investments not registered with the SEC.
Your assets are also held in your name
SIPC is a backstop. Your first layer of protection is that your investments are held in a named account in your name, segregated from both nsave's and Alpaca's own funds. They can't be used to cover either company's obligations.
