Yes, eToro offers FDIC insurance for specific customer funds, but the coverage depends on the type of account and assets you hold.
Even though eToro operates under US regulatory oversight, it's important to understand that FDIC insurance applies only to specific scenarios.
For US customers, cash deposits in eToro accounts are held in custodial accounts at FDIC-insured banks such as:
These funds are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor, per bank, in the event of the bank's failure . This insurance covers cash held for trading:
When you invest in US stocks, ETFs, or options through eToro USA Securities Inc., your assets are protected by the Securities Investor Protection Corporation (SIPC).
SIPC coverage provides up to $500,000 per customer, including a $250,000 limit for cash, in the event of the brokerage firm's failure.
It's important to note that SIPC protection does not cover losses due to market fluctuations .
Cryptocurrency investments made through eToro USA LLC are not insured by the FDIC or SIPC. These digital assets are held by eToro's overseas affiliates in segregated wallets and are separate from corporate funds.
While this segregation provides a level of security, there is no federal insurance protecting against potential losses from exchange insolvency or cyberattacks .
Still confused?
Let me simplify them in a few words:
- FDIC Insurance: This covers up to $250,000 per depositor for cash held in custodial accounts at FDIC-insured banks.
- SIPC Protection: This one covers up to $500,000 per customer for securities (including a $250,000 limit for cash) held with eToro USA Securities Inc.
- Crypto: Assets like Bitcoin and Ethereum are not covered by FDIC or SIPC insurance. These are held in segregated wallets by eToro's affiliates.
It's important that you fully understand the scope of these protections so you can make informed decisions about managing the risks in your investment portfolio.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
This communication is intended for information and educational purposes only and should not be considered investment advice or investment recommendation. Past performance is not an indication of future results.
Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which hasbeen prepared by our partner utilizing publicly available non-entity specific information about eToro.
About Mike Druttman
