FDIC Insurance
Federal Deposit Insurance Corporation coverage that guarantees deposits at member US banks up to $250,000 per depositor per ownership category. FDIC insurance was created in 1933 in response to the bank runs of the early 1930s; it transformed the deposit franchise by removing the rational reason for most depositors to run on a healthy bank. Deposits above the $250,000 limit -- "uninsured" deposits -- can still be at risk if the bank fails, though regulators have occasionally invoked discretionary backstops (as in March 2023) when failures threaten broader system stability.
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