IB Enhances Cash Protection w/ Insured Bank Deposit Sweep
Interactive Brokers has introduced a major security update for IBKR Pro clients. The firm launched an Insured Bank Deposit Sweep program to offer greater protection for uninvested cash. It applies specifically to IBKR Pro users with individual accounts, IRAs, and organizational accounts.
About the Insured Bank Deposit Sweep Program
The new Insured Bank Deposit Sweep Program offers additional FDIC insurance for free cash balances held in brokerage accounts. It aims to give clients greater peace of mind by increasing cash protection beyond standard limits.
Insurance Coverage Details
Individual and institutional accounts get up to USD 5.0 million in FDIC coverage. Joint accounts receive an even higher limit of up to USD 10.0 million. In addition, all eligible brokerage accounts still receive SIPC protection covering the first USD 250,000 in cash. It brings the total insurance to USD 5.25 million for individual accounts and USD 10.25 million for joint accounts.
What Happens to Excess Cash
Cash balances exceeding these limits don’t go unprotected. They remain safeguarded under the SEC’s Customer Protection Rule 15c3-3. It ensures proper handling of customer funds and is backed by Interactive Brokers’ own equity capital.
Benefits for Traders
This update will offer these benefits:
Higher Cash Safety
Traders and investors can keep up to USD 5.25 million (individual) or USD 10.25 million (joint) in uninvested cash without splitting it across banks. It simplifies cash management.
No Change in Trading Access
Clients can continue to use their funds instantly despite the added insurance. No restriction on buying stocks, options, futures, currencies, or bonds.
Better Risk Management
Those who hold large cash positions — whether during market uncertainty or before major trades — can now do so with lower risk. The expanded insurance reduces exposure to institutional failures or systemic risks.
No Drop in Interest Earnings
Clients still earn competitive interest on their cash. The protection boost does not impact earnings. It makes it more efficient for passive investors or short-term holders.
Simplified Compliance
The program doesn’t require clients to make structural changes or new sign-ups. Everything runs within existing accounts. Means, no additional paperwork or oversight for compliance-focused investors.
About Interactive Brokers
Interactive Brokers (IB) is a global brokerage firm. It provides trading platforms to trade stocks, options, futures, forex, bonds, and funds. IB has low-cost trading, comprehensive market access, and decisive analytical tools. Also, it provides real-time pricing and risk management on trading floors. IB recently expanded trading access for its Forecast Contracts.
Summing Up
The updated cash protection program significantly increases security for uninvested balances. Clients can continue to trade and earn interest with no interruptions to their account experience.
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