Is Public App FDIC Insured? How Your Money Is Protected

Public App is an investment platform where individuals can manage various financial assets. Users frequently inquire about the safety of their funds, particularly concerning Federal Deposit Insurance Corporation (FDIC) insurance. This article will clarify how cash and investments are protected within the Public App environment.

Understanding Deposit Insurance

The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects depositors in the event of a bank failure. It was established to maintain stability and public confidence in the nation’s financial system. FDIC insurance primarily covers deposit accounts at insured banks.

This protection extends to various types of accounts, including checking accounts, savings accounts, money market deposit accounts (MMDAs), and certificates of deposit (CDs). The standard coverage limit is $250,000 per depositor, per FDIC-insured bank, for each account ownership category. This means if you have multiple accounts at the same bank but in different ownership categories (e.g., a single account and a joint account), each category can be insured up to the $250,000 limit.

FDIC insurance covers the principal and any accrued interest in covered accounts. However, it does not protect against losses for non-deposit investment products, even if they are offered by an FDIC-insured bank. This includes stocks, bonds, mutual funds, annuities, and the contents of safe deposit boxes.

Public App and Cash Protection

While Public App itself is not a bank, cash balances held by users can be eligible for FDIC insurance. The platform utilizes a mechanism where uninvested cash, such as funds in a High-Yield Cash Account, is swept into one or more FDIC-insured partner banks.

This coverage applies to the cash held at these partner banks, subject to the standard FDIC limits of $250,000 per depositor, per bank, per ownership category. Some platforms may spread balances across multiple partner banks to potentially extend overall FDIC coverage beyond the single-bank limit. For instance, cash swept into multiple program banks by Public App’s clearing firm, Apex Clearing, can be covered up to $250,000 per bank.

Understanding Investment Protection

Investment products held in brokerage accounts are not covered by FDIC insurance. Instead, these assets are typically protected by the Securities Investor Protection Corporation (SIPC). SIPC is a non-profit organization created by Congress to protect customers of brokerage firms that become financially troubled. It safeguards securities and cash in brokerage accounts in the event the brokerage firm fails.

SIPC protection covers up to $500,000 per customer for assets held at a SIPC-member brokerage firm. This $500,000 limit includes a sub-limit of $250,000 for uninvested cash within the brokerage account. SIPC protection does not safeguard against losses due to market fluctuations, declining investment values, or poor investment advice. Its purpose is to return customers’ securities and cash if the brokerage firm itself fails.

Summary of Protections

Users of Public App benefit from distinct layers of protection depending on their assets. Uninvested cash held in products like the High-Yield Cash Account is eligible for FDIC insurance. These funds are typically swept into various FDIC-insured partner banks, providing coverage up to $250,000 per depositor, per bank, per ownership category, against bank failure.

Conversely, investment securities such as stocks, bonds, and mutual funds, along with any associated cash, are protected by SIPC. This coverage applies if the brokerage firm, Public App’s clearing firm (Apex Clearing), becomes insolvent. SIPC protects up to $500,000 in securities, including up to $250,000 in cash, per customer. Investors should distinguish between these two protections: FDIC covers bank deposits, while SIPC covers brokerage assets against firm failure, not market risk.