If you use your bank account brokerage to buy stocks, what happen to the stocks if the bank goes bankrupt like this?
That's way too low.
The other thing this exposed is that FDIC protection for businesses is also too low.
There are a lot of limits and thresholds like this that could use regular (or even extant) reindexing.
EDIT: it was increased to 250k in 2008 or 2010. As you note this is too low. It seems like it has been rather low its whole history. Given that our inflation rates are basically halving the currency every decade or so, it should be reindexed much more frequently (and also raised in any terms).
One thing I came across to watch out for though is that if you hold fixed income securities (e.g. GICs) that are issued by the same bank as the brokerage account, then if it goes bust, the securities are NOT covered by insurance.
"CIPF does not cover: the insolvency or default of the company or organization that issued your security"
For example, if you hold a $500k GIC issued by TD Bank in a self directed TD brokerage account, and TD goes bust, then you're gonna have a bad day.
In Australia most trade accounts use 'Chess' system which basically means when they buy shares they buy them in the account holders name so you own them and if the broker collapses it's not a problem.
In US I believe they are generally owned in the brokers name but using 'SPIC' so you have $500k protection coverage similar to bank deposit protection.