What does FDIC Insurance guarantee for bank account holders?

What does FDIC Insurance guarantee for bank account holders?

• A. Protection against fraud
• B. Insurance on deposits up to $250,000
• C. High interest rates on savings accounts
• D. Easy access to loans

Answer: (B)

FDIC Insurance guarantees that bank account holders are protected for deposits up to $250,000 per depositor, per insured bank, for each account ownership category. This insurance applies to checking accounts, savings accounts, money market deposit accounts, and certificates of deposit (CDs), ensuring that in the unlikely event of a bank failure, the depositor's money will be secure and refundable up to the specified limit. The purpose of this insurance is to maintain public confidence in the U.S. financial system, encouraging individuals to save and deposit money without fear of losing their funds due to bank insolvency. While protection against fraud is important, it does not fall under the FDIC’s coverage, as the insurance specifically applies to the safety of deposits rather than activities like identity theft or unauthorized transactions. High-interest rates and easy access to loans are not guaranteed by the FDIC and depend on individual financial institutions rather than insurance coverage.

FDIC Insurance guarantees that bank account holders are protected for deposits up to $250,000 per depositor, per insured bank, for each account ownership category. This insurance applies to checking accounts, savings accounts, money market deposit accounts, and certificates of deposit (CDs), ensuring that in the unlikely event of a bank failure, the depositor's money will be secure and refundable up to the specified limit. The purpose of this insurance is to maintain public confidence in the U.S. financial system, encouraging individuals to save and deposit money without fear of losing their funds due to bank insolvency.

While protection against fraud is important, it does not fall under the FDIC’s coverage, as the insurance specifically applies to the safety of deposits rather than activities like identity theft or unauthorized transactions. High-interest rates and easy access to loans are not guaranteed by the FDIC and depend on individual financial institutions rather than insurance coverage.