What term describes the protection that covers bank deposits up to a limit if the bank fails?

• A. FDIC Insurance protects deposits up to $250,000 per depositor per insured bank
• B. Credit Insurance
• C. Liability Insurance
• D. Mortgage Insurance

Answer: (A)

FDIC insurance is the protection that covers bank deposits if a bank fails. It guarantees deposits held at insured banks up to $250,000 per depositor, per insured bank, for accounts like checking, savings, money market, and certificates of deposit. This means your funds within that limit are protected even if the bank encounters trouble, and you can have coverage at more than one bank, with the limit applying at each institution. The protection comes from the Federal Deposit Insurance Corporation, which steps in to reimburse insured deposits. Other types of insurance—credit, liability, or mortgage insurance—cover different things (loans, liabilities, or securing loans) and do not protect standard bank deposits.