Which federal agency is primarily responsible for insuring deposits in banks?

The Federal Deposit Insurance Corporation (FDIC) is the federal agency primarily responsible for insuring deposits in banks. Established in 1933, the FDIC provides deposit insurance to depositors in U.S. commercial banks and savings institutions. This insurance protects depositors by covering their deposits up to a certain limit in the event that an FDIC-insured bank fails. The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.

By insuring deposits, the FDIC helps maintain public confidence in the nation’s financial system. This crucial role ensures that individuals and businesses are secure in their savings and encourages stability within the banking sector. The FDIC also monitors and regulates financial institutions, helping to prevent bank failures.

In contrast, the other agencies mentioned serve different functions: the National Credit Union Administration (NCUA) insures deposits at federal and most state-chartered credit unions; the Federal Reserve System serves as the central bank of the United States, primarily focusing on monetary policy; and the Securities and Exchange Commission (SEC) oversees securities markets and protects investors, which is unrelated to deposit insurance.