Reassurance from E-Trade

As E-Trade’s stock bounced back to $5+ level, it seems the bankruptcy rumor has calmed down a little bit. Actually, instead of going out of business, E-Trade may become a take-over target (that speculation played a big role in driving up the stock price).

Anyway, today I received an email from E-Trade regarding my account with the broker and the safety of my money:

Because the sweep option for your brokerage account is the E*TRADE FINANCIAL Extended Insurance Sweep Deposit Account, you have one of the highest levels of asset protection in the industry—including 5X the FDIC coverage for our standard sweep accounts:

• FDIC insures all E*TRADE Bank accounts to at least $100,000 and Extended Insurance Sweep Deposit Accounts to $500,000.
• SIPC protects E*TRADE Securities customers up to $500,000 (including $100,000 for claims for cash).
• Additional E*TRADE Securities protection of up to $150 million per brokerage account is underwritten by London insurers (aggregate $600 million).

E*TRADE is well capitalized by regulatory standards. In addition, our core business is thriving. Today, over 3.5 million customers worldwide rely on us for their trading, investing, and banking needs.

It’s good that E-Trade decided to address my concerns directly, they could have done it earlier to ease account holders’ nerve when the news first broke out.

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