What does the FDIC primarily protect?

The Federal Deposit Insurance Corporation (FDIC) primarily protects consumer deposits in banks. Established in response to the thousands of bank failures in the 1930s, the FDIC's main role is to maintain public confidence in the U.S. financial system by insuring deposits made by individuals and businesses at member banks. This insurance protects depositors against losses in the event that an FDIC-insured bank fails, covering checking accounts, savings accounts, and certificates of deposit (CDs) up to the statutory limit, which is currently $250,000 per depositor, per insured bank, for each account ownership category.

While government securities, real estate investments, and credit unions are all important components of the broader financial environment, they are not the primary focus of FDIC protection. Government securities are backed by the government and have their own mechanisms for security, while real estate investments carry their own risks and are not insured by the FDIC. Credit unions, although similar in function to banks, are insured by the National Credit Union Administration (NCUA), not the FDIC. Thus, the correct choice emphasizes the FDIC's role in ensuring the safety of consumer deposits, which is central to its purpose and mission.