One thing I never realized until this weekend was that the SIPC insurance your brokerage firm provides is not just by account owner. Each “separate capacity” is protected up to $500,000!

From the SIPC website:

SIPC protection of customers with multiple accounts is determined by “separate capacity.” Each separate capacity is protected up to $500,000 for securities and cash (including a $250,000 limit for cash only). Accounts held in the same capacity are combined for purposes of the SIPC protection limits.

Examples of separate capacities are:

• individual account;
• joint account;
• an account for a corporation;
• an account for a trust created under state law;
• an individual retirement account;
• a Roth individual retirement account;
• an account held by an executor for an estate; and
• an account held by a guardian for a ward or minor.

The following are examples of separate accounts:

• Mary has an account in her name at her brokerage firm. Mary is protected by SIPC up to $500,000.
• Joe has two brokerage accounts, each in his own name. For purposes of SIPC protection, Joe’s accounts are combined, and Joe is protected by SIPC only up to a total of $500,000.
• Joe and Mary are married and they have a joint brokerage account which is separate from the individual accounts that they each have at the firm. An additional maximum of $500,000 of SIPC protection is available for the joint account.
• Joe has a Roth account and an IRA account, at the same brokerage. Joe is protected up to $500,000 for the Roth account and up to $500,000 for his IRA account.

The more you know! Hope that knowledge wasn’t super obvious to everyone but me and helps someone!