An insured account is a type of account maintained at banks, savings and loan associations (S&Ls), credit unions, or brokerage firms that are protected by federal, state, or private insurance organizations. These accounts are safeguarded against losses, subject to certain limits.
The Securities Investor Protection Corporation (SIPC) is a nonprofit corporation supported by its membership of securities brokers and dealers. It was developed to protect their customers and to promote confidence in the securities markets. In principle, SIPC provides certain amounts of insurance on cash and securities left on deposit in a brokerage account. This insures investors against the failure of the brokerage firm but not against a decline in the value of securities.
