Is Schwab Crypto Safe? Custody, Paxos & Insurance Explained

Schwab Crypto is built for safekeeping, but it isn’t insured like a bank deposit. Your crypto is held by Charles Schwab Premier Bank, SSB, a Schwab bank, with Paxos Trust Company LLC providing sub-custody, and most of it is kept in cold (offline) storage. Schwab says you legally own the coins, and its Security Guarantee covers losses from unauthorized activity in Schwab Crypto accounts. But the crypto itself is not FDIC-insured or SIPC-protected, prices can fall sharply, and transfers can’t be reversed.

Here’s how each layer of protection works, and where it stops, from Schwab’s own disclosures as of October 22, 2026.

Schwab Crypto safety at a glance

Who holds your crypto

Schwab Crypto is “a cryptocurrency account held at Charles Schwab Premier Bank, SSB.” According to Schwab’s launch announcement, the bank “will serve as the custodian of clients’ digital assets, responsible for safekeeping and record-keeping.”

The bank works with Paxos. Schwab’s FAQ says your crypto is custodied “in collaboration with a regulated third-party firm, Paxos Trust Company LLC, that provides sub-custody services.” Schwab’s announcement describes Paxos as “a leading OCC-regulated blockchain infrastructure provider” that “will deliver sub-custody and trade execution services,” using “a federally overseen trust model.”

On storage, Schwab says: “Supported cryptocurrencies are stored in a mix of cold (offline) storage and hot (online) storage. The majority of cryptocurrency is held in cold storage, though some is held in hot wallets to support day-to-day operations.”

What is and isn’t insured

The crypto: not insured

Schwab’s disclosures are direct: “Cryptocurrencies offered by Charles Schwab Premier Bank, SSB, are not securities; are not protected by SIPC; are not insured by the FDIC; are not deposits; and may lose value.” The FAQ adds: “your Schwab Crypto account is not a deposit account and is not FDIC insured.”

FDIC insurance protects deposits if a bank fails, and SIPC protects securities if a brokerage fails. Crypto in Schwab Crypto is neither a deposit nor a security, so neither applies.

The cash: FDIC-insured, with a shared limit

U.S. dollars sitting in your crypto account are treated differently. Schwab says they “are held in one or more omnibus deposit account(s) at Charles Schwab Premier Bank, SSB, and are insured on a ‘pass-through’ basis, in aggregate, based on account ownership type by the FDIC up to the standard maximum deposit insurance amount of $250,000.”

The $250,000 limit is shared with any money you hold at the same bank through Schwab’s Cash Features Program. That cash also earns no interest, so keeping only what you need in the crypto account is sensible on both counts.

The Schwab Security Guarantee

Schwab’s guarantee: “Schwab will cover losses in any of your Schwab accounts due to unauthorized activity.” Its guarantee page answers the crypto question directly: “Does the guarantee apply to Schwab Crypto? Yes. The guarantee applies to all Schwab Crypto accounts offered by Charles Schwab Premier Bank.”

It has important limits. Schwab says the guarantee doesn’t cover:

• Anyone you share your login with. “If you share this information with anyone, we will consider their activities to have been authorized by you.”
• Apps you authorize. Aggregator apps and the companies they work with “are considered your authorized persons.”
• Remote access. “When you allow or give a person … remote access into your device or Schwab account, the activity taken by such person in your Schwab account is not covered.”

You’re also expected to review your statements and report unauthorized activity quickly, using the contact options on Schwab’s own website.

The Schwab Satisfaction Guarantee is separate. It refunds eligible fees listed in the crypto pricing guide if you’re unhappy, within 90 days, but “no market losses will be refunded,” and blockchain network fees aren’t eligible.

How transfers are protected

Crypto sent out of an account can’t be pulled back, so Schwab adds several checks before coins can leave:

• Enrollment: you must verify your identity and set up a passkey before you can transfer crypto.
• Step-up authentication: the passkey is required “such as adding an address to your allowlist or sending crypto to an allowlisted address.”
• Allowlist: you can only send to addresses you’ve added, and “a minimum 24-hour cooldown period is required” before a new one can be used. Schwab “may deny an address based on its internal reviews.”
• Limits: up to 3 withdrawals per 24 hours and $5,000 per transfer.
• Enrolled owners only: “Only account owners enrolled in crypto transfers can send coins from your account.”

For everyday account security, Schwab points clients to its SchwabSafe page, and says it uses protections “from biometric authentication to specialists dedicated to privacy and security.”

The risks that remain

• Price risk. Schwab’s disclosure: “Investing in cryptocurrencies involves risk, including the risk of total loss of principal invested,” and investors “should view digital currencies as a purely speculative instrument.” No guarantee covers a falling price.
• Irreversible transfers. “Once you send crypto, Schwab cannot reverse it or reimburse you.” Sending to the wrong address or network can lose the coins for good.
• Scams that use you. The guarantee doesn’t cover activity by someone you gave your login or remote access to. Scammers rely on exactly that.
• Moving states. Accounts “may be restricted or closed if you move to an unsupported jurisdiction,” which includes New York and Louisiana.

How to keep your Schwab Crypto account safe

1. Never share your login or passkey, and never let anyone remote into your phone or computer.
2. Check every address in your allowlist, and remove any you didn’t add.
3. Send a small test amount before a large withdrawal.
4. Use only official channels: schwab.com, the Schwab Mobile app, and thinkorswim.
5. Review your monthly statement, which Schwab sends “regardless of balance or activity.”

Related Schwab Crypto guides

• Can you withdraw crypto from Schwab to a wallet?
• Schwab Crypto explained: fees, coins, states, and how it works
• Schwab Crypto vs E*Trade crypto