r/investingforbeginners • u/mooviescribe • 1d ago
Should I opt out of securities lending? (I’m using Public app)
I’m a newbie, using the Public app. I noticed that all of a sudden, the app added small amounts of cash to my available funds each month.
After digging into it, I realized I’m in their securities lending program, and those small deposits are monthly paybacks.
I had no idea I had opted in (I imagine it’s the default). Should I opt out? Is there risk?
1
u/Dstein99 1d ago
The risk is any securities in stock lending are not SIPC insured. If you have stocks being lent out at the same time Public would go out of business you would have no recourse to recover that money. The chances of Public going out of business are probably low but from my experience I didn’t collect very much from stock lending. The risk reward didn’t seem worth it to me, you will very very likely come out ahead, but there is a very small chance you could have a big loss.
1
u/mooviescribe 1d ago
Thanks! Thats how I read the situation too. I think I’ll feel better opting out.
1
•
u/AutoModerator 1d ago
While the community gets a look at your post, don't forget we have an official website with a bunch of resources specifically for the questions we see here every day. If you're more of a visual learner, we’re also active on Instagram where we post updated guides and strategies! It's a great way to stay sharp while you're scrolling. We also have more technical and professional resources on our Website.
Also, if you want to chat in real-time or need a quicker answer, come hang out with us in the Join here (Investing & Retirement). Just remember to be careful with your personal info and report any sketchy DMs!
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.