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The Role of the U.S. Government
The U.S. government has strict rules and regulations to monitor the safety of your bank. These
rules and regulations protect you from unsafe banking practices. They also allow the U.S.
government to protect bank depositors if a bank fails. As a general rule, your deposits in a bank
are insured up to $100,000.
The U.S. government plays a different role when it comes to investments. Investment products
are not insured by the FDIC and can involve risks. The U.S. government has rules and
regulations to make sure that the features of the investment product are clearly disclosed to you
so that you can make an informed decision before you buy. It also monitors industry rules to be
sure that sellers of investment products follow certain standards of conduct. These rules are
meant to make sure that you are treated fairly and to ensure that the product that is recommended
for you to buy is suitable for your personal investment needs.
The U.S. government also oversees the Securities Investor Protection Corporation (SIPC). This
corporation protects customers of broker/dealers who are insured by SIPC against the physical
loss of securities, including mutual funds, if the broker/dealer holding the securities for you fails.
It does not protect investors against a decline in the market value of securities. SIPC insurance
is not the same as federal deposit insurance provided by the FDIC.
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Tips for First Time Investors
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