Your brokerage account has SIPC protection up to $500,000 ($250,000 for cash) if Robinhood Securities fails, but SIPC does not cover investment losses from market movements.
This analysis describes what Robinhood's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
The SIPC disclosure informs customers of the scope and limits of account protection, which is material to understanding the actual financial safety net available in the event of broker-dealer insolvency.
The agreement discloses that SIPC coverage protects up to $500,000 in securities and cash per customer in the event of broker-dealer failure, but explicitly states this protection does not cover losses resulting from market risk or investment decisions.
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"Robinhood Securities LLC is a member of the Securities Investor Protection Corporation (SIPC). Securities in your account protected up to $500,000 (including $250,000 for claims for cash). SIPC does not protect against loss from market risk or bad investment decisions.— Excerpt from Robinhood's Robinhood Customer Agreement (PDF)
REGULATORY LANDSCAPE: SIPC membership and disclosure obligations are governed by the Securities Investor Protection Act of 1970 and SIPC rules. Broker-dealers are required to disclose SIPC membership and coverage limits to customers under applicable FINRA and SEC rules. GOVERNANCE EXPOSURE: Low. SIPC disclosure is a standard regulatory requirement for registered broker-dealers. The disclosure as stated appears consistent with applicable requirements. JURISDICTION FLAGS: SIPC coverage applies uniformly to all US customers of member broker-dealers. Non-US customers may not be covered by SIPC. CONTRACT AND VENDOR IMPLICATIONS: The SIPC disclosure should be reviewed annually for accuracy and consistency with current SIPC coverage limits and any changes to SIPC rules or guidance. COMPLIANCE CONSIDERATIONS: Confirm that SIPC membership disclosure is delivered to customers at or before account opening in the format required by applicable SEC and FINRA rules, and that any supplemental excess SIPC coverage (if applicable) is disclosed separately and accurately.
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The SIPC disclosure informs customers of the scope and limits of account protection, which is material to understanding the actual financial safety net available in the event of broker-dealer insolvency.
The agreement discloses that SIPC coverage protects up to $500,000 in securities and cash per customer in the event of broker-dealer failure, but explicitly states this protection does not cover losses resulting from market risk or investment decisions.
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