What Bank Does Webull Use for Your Money?
Learn how Webull safeguards your funds and investments by utilizing established banks and clearing firms, ensuring your assets are secure.
A common and important consideration for individuals using online trading platforms involves understanding how their funds and assets are held and protected. Knowing the underlying financial institutions and protective measures in place provides investors with peace of mind regarding their capital.
How Webull Manages Your Cash
Webull itself does not operate as a bank; instead, it collaborates with established, regulated financial institutions to manage uninvested customer cash. Through its cash management program, Webull sweeps uninvested funds into partner banks that are insured by the Federal Deposit Insurance Corporation (FDIC). This arrangement ensures that your uninvested cash is protected up to the standard FDIC limit of $250,000 per depositor per insured bank. For instance, Webull indicates it can provide up to $1,750,000 or even $2.5 million in total FDIC coverage by distributing funds across multiple program banks. One such partner bank for certain services, like the Webull Debit Card, is Stearns Bank, N.A., an FDIC member.
How Webull Manages Your Securities
Customer securities, such as stocks, exchange-traded funds (ETFs), and options, are handled distinctly from cash. Webull utilizes Apex Clearing Corporation as its primary clearing firm for US-based accounts. A clearing firm plays a central role in the brokerage industry by facilitating the settlement of trades, ensuring that securities and funds are accurately exchanged between buyers and sellers. They are also responsible for the custody of customer assets, securely holding them on behalf of the brokerage’s clients.
To safeguard these securities, Webull Financial LLC is a member of the Securities Investor Protection Corporation (SIPC). SIPC protection covers customer securities and cash held in a brokerage account up to $500,000, with a sub-limit of $250,000 for cash. It is important to note that SIPC protection addresses losses resulting from the financial failure of a brokerage firm, not from market fluctuations or declines in the value of investments. In addition to SIPC, Apex Clearing Corporation provides supplemental insurance coverage beyond these standard SIPC limits.
Webull’s Role as a Broker-Dealer
Webull operates as a broker-dealer, which means it is a firm that buys and sells securities for its customers and for its own account. Webull Financial LLC is regulated by the Securities and Exchange Commission (SEC) and is a member of the Financial Industry Regulatory Authority (FINRA), among other key organizations like the NYSE and NASDAQ. This regulatory oversight ensures that Webull adheres to stringent financial and operational standards designed to protect investors.
The practice of a broker-dealer using separate clearing firms and partner banks is a common and established industry model. This operational structure helps segregate customer assets from the broker-dealer’s own operating capital. By entrusting the custody of securities to a dedicated clearing firm and the management of cash to FDIC-insured banks, Webull adds layers of security and oversight.