What happens to my investments if Vanguard becomes insolvent? (2024)

FAQs

What happens to my investments if Vanguard becomes insolvent? ›

The securities that underlie the funds are held by a custodian, not by Vanguard. Vanguard is paid by the funds to provide administration and other services. If Vanguard ever did go bankrupt, the funds would not be affected and would simply hire another firm to provide these services.

In the unlikely event that we become insolvent, your money and investments would be returned to you as quickly as possible, or transferred to another provider. This is because your money and investments are held separately from our own.

First, the chances of Vanguard failing are miniscule. That said, let's talk about brokerage accounts for a minute. Brokerage accounts are not backed by the FDIC but by the Securities Investor Protection Corp (SIPC), which protects accounts up to $500,000.

Insurance coverage

Money market funds and other securities held in the Vanguard Brokerage Account are eligible for SIPC coverage. Securities in your brokerage account are protected up to $500,000. To learn more, visit the SIPC's website. Up to $250,000 by FDIC insurance.

In most cases, you can get your money back within 2 days. Vanguard charges $0 for basic withdrawals, but some methods may cost more.

Under Vanguard's Customer Protection Guarantee, Vanguard will reimburse you for unauthorized distributions from your account(s) that occur through no fault of your own, subject to eligibility requirements.

In case the records of the failed brokerage firm are found to be accurate, provision is made to transfer the customer accounts to another brokerage firm by SIPC and the trustee.

When the market cratered, investors withdrew $16.4 billion from Vanguard's index mutual funds. What accounts for remaining index mutual fund outflows? Johnson says it could be clients pulling out money because they're retiring, or because they're negatively affected by the pandemic.

Long-term investors will appreciate Vanguard's low fees. With zero-commission brokerages, continuous coverage of trendy stocks like Tesla Inc. (ticker: TSLA) and the extreme fluctuations of meme stocks like GameStop Corp. (GME), it's easy to overlook the benefits of a buy-and-hold strategy.

While Fidelity wins out overall, Vanguard is the best option for retirement savers. Its platform offers tools and education focused specifically on retirement planning.

How much money is in the average Vanguard account? ›

The average 401(k) balance at Vanguard was $112,572 in 2022. Your age, income and job tenure may affect the size of your 401(k) balance is.

Company news

Vanguard today launched two new ETF products, Vanguard Intermediate-Term Tax-Exempt Bond ETF (VTEI) and Vanguard California Tax-Exempt Bond ETF (VTEC), index municipal ETFs that provide federally tax-free yield for tax-sensitive clients.

If there's a pending fee in any of your Vanguard accounts, this could prevent the withdrawal from being sent. Or if you change your nominated bank account after submitting a withdrawal. You can also choose to withdraw when you sell your holdings if you have a nominated and verified bank account.

If you've got any regular payments or withdrawals set up, you need to cancel those too. Once your balance is at zero and you have no active payments, send us a secure message, we'll close your account as soon as possible: Log into your account. From the left-hand menu go to Secure messages.

“Vanguard is financially strong, demonstrated clearly by the strong and steady cash flows experienced over the past two decades, including the 2008-09 financial crisis,” said spokeswoman Emily M. Farrell.

Inflation is becoming more broad-based and isn't going away easily. We see a 25% chance of a U.S. recession in 2022 and a 65% chance in 2023. Europe is likely to enter a mild recession around year-end.

You should consider keeping some money in your settlement fund so you're ready to trade. You can use your settlement fund to buy mutual funds and ETFs (exchange-traded funds) from Vanguard and other companies, as well as stocks, CDs (certificates of deposit), and bonds.