Since its launch in 2017, Webull has gained popularity fast. However, to protect their deposits, many investors want to know if this trading platform is regulated by renowned institutions. That leaves the question – is Webull FDIC insured?
No, Webull is not FDIC insured. The Federal Deposit Insurance Corporation provides coverage only for US banks, not brokerage companies. However, it doesn’t mean that Webull isn’t covered at all – SIPC and a third part company (Apex) protect depositors and their accounts. Webull is also regulated by SEC and FINRA, which provides additional security for its clients.
If you want to find out more about how Webull’s accounts are insured as well as what are the main advantages of using this platform, find your answers in the article below.
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No, Webull Is Not FDIC Insured
The Federal Deposit Insurance Corporation provides coverage for depositors, but only those with funds in US banks. It means that, in the case of bankruptcy and bank failure, people won’t lose their money – it is a protection against a potential loss.
Webull, on the other hand, is not a bank but a broker company that provides a trading platform. It offers only ETF, cryptocurrency, US stock, and options trading and doesn’t include any banking products or services. Therefore, Webull is not regulated by this independent federal agency.
Is Not Having the Coverage of The Federal Deposit Insurance Corporation a Red Flag?
Does it mean that assets in your Webull account won’t be protected? Not at all! Keep in mind that this platform is regulated and insured by other trustworthy institutions. Not being insured by FDIC only means that Webull doesn’t provide any bank products that can go under FDIC’s coverage.
That being said, remember that you’ll not be protected from investment losses and market swings. As with other similar platforms, you’re responsible for your investment decisions – the insurance will only apply if Webull goes insolvent or fails to keep your stocks and other assets safe.
Does Webull Have SIPC Insurance?
FDIC insurance is not the only one you should consider when looking into this trading platform. Note that Webull has other types of coverage – insurance provided by The Securities Investor Protection Corporation is one of them. SIPC insurance protects the investors from the brokerage firm’s failure.
With SIPC coverage, each Webull account is insured with up to half a million dollars, while cash balances are covered with up to $250,000. Therefore, in a highly unlikely case of bankruptcy, your assets will be protected.
Your Account Will Be Insured With Apex as Well
As an added protection, Webul executives have decided to purchase Apex insurance as an additional one. Apex, a Webull’s clearinghouse, provides even more extensive coverage – the insurance goes up to $37,500,000 for the client’s assets and up to $900,000 for the customer’s cash balance. For ultimate protection, make sure your uninvested cash does not surpass the said figure.
Not all brokers offer this additional protection, making Webull a much safer choice. However, as mentioned above, refunds aren’t possible for losses due to the declined market value of your assets, just the company’s failures.
Webull Is Also Regulated by SEC and FINRA
US Securities and Exchange Commission and The Financial Industry Regulatory Authority are highly reputable institutions. Their main job is overseeing brokers and keeping the exchange market fair and fraud-free.
Since Webull is registered with both organizations whose primary goal is to protect investors, you shouldn’t be afraid of scams or unjust treatment.
Why Do Investors Choose Webull?
There are several reasons this company attracts so many investors – excellent insurance is only one of them.
The main benefits Webull offers are low expenses. There are no inactivity and pre-contract fees, trading is cost-free, and there is no commission. On top of that, it’s very user-friendly but still manages to offer advanced tools. Having many cryptocurrencies available for trading also attracts a large number of investors.
Here is a simple comparison between Webull and Robinhood, another fairly popular trading platform:
|Stock screener tools (help you track stocks that deserve your attention)||Yes||No|
|Paper trading (allow you to track and trade your asset hypothetically, without any risk of losses)||Yes||No|
|Cash management account||No||Yes|
|Short selling (selling shares without buying)||Yes||No|
|Total coins in crypto-trading||11||7|
Are There Any Downsides of Using This Commission-Free Trading Platform?
Of course, there are some not-so-beneficial attributes that can make you review opening a Webull account. Consider the following features:
- Webull is not a good option for beginners – it demands some previous trading experience,
- It has high wire transfer fees – between $25 and $45, depending on whether it’s a national or international transfer,
- There are limited investment options – for example, Forex and OTC featured are not available,
- There is no interest on idle cash and no defaulted fund for it – the uninvested money doesn’t have a chance to grow; it’s just deposited in your account,
- Educational support is lacking,
- Finding Webull’s financial data can be difficult – since it’s a private company, access to the company’s financial data isn’t required.
Is It Safe to Trade via Webull Account?
You shouldn’t be afraid of trading with your Webull account, even though it’s not insured by FDIC. SIPC and Apex coverage combined with registering with SEC and FINRA should be a scam-free indicator and proof that your assets and personal accounts will stay safe, even if the company faces bankruptcy someday in the future.