Okay, so I was all set to go open up an SEP IRA (besides being a dancer, I'm a freelance photographer/assistant) at Fidelity. Then I noticed that the IRA wouldn't be FDIC insured but SIPC insured. I HAVE done research and read through the SIPCs website, but I would like some further input/opinions (ahem, Melonie...) here on the differences between the FDIC and the SIPC.
It says this on the SIPC website:
"SIPC is not the FDIC. The Securities Investor Protection Corporation does not offer to investors the same blanket protection that the Federal Deposit Insurance Corporation provides to bank depositors.
How are SIPC and the FDIC different? When a member bank fails, the FDIC insures all depositors at that institution against loss up to a certain dollar limit. The FDIC’s no-questions-asked approach makes sense because the banking world is “risk averse.” Most savers put their money in FDIC-insured bank accounts because they can’t afford to lose their money.
That is precisely the opposite of how investors behave in the stock market, in which rewards are only possible with risk. Most market losses are a normal part of the ups and downs of the risk-oriented world of investing. That is why SIPC does not bail out investors when the value of their stocks, bonds and other investments falls for any reason. Instead, SIPC replaces missing stocks and other securities where it is possible to do so ... even when the investments have increased in value.
SIPC does not cover individuals who are sold worthless stocks and other securities. SIPC helps individuals whose money, stocks and other securities are stolen by a broker or put at risk when a brokerage fails for other reasons."
...but I'm still confused... I'm VERY new to investing.. so forgive me...
But is it better to open an IRA that's FDIC insured rather than SIPC insured??



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