Savings Program Protection

A

The federal government provides protection to certain types of savings programs against loss through insurance and guarantees. This protection is typically provided by the Federal Deposit Insurance Corporation (FDIC), which is an independent agency of the federal government. The FDIC is responsible for insuring deposits at banks and savings associations that are members of the FDIC.

Of the options given, all but one are protected by the federal government against loss. Here is a breakdown of each option:

A. A bond issued by one of the 50 states: State bonds are not protected by the FDIC. Instead, the creditworthiness of the state issuing the bond determines its safety. State bonds are generally considered to be less safe than U.S. Treasury bonds, but more safe than corporate bonds. Investors in state bonds should carefully evaluate the creditworthiness of the state before investing.

B. A U.S. Treasury bond: U.S. Treasury bonds are considered to be one of the safest investments available, as they are backed by the full faith and credit of the U.S. government. They are protected by the federal government against loss and are not insured by the FDIC.

C. A U.S. savings bond: U.S. savings bonds are also backed by the full faith and credit of the U.S. government, and are considered to be very safe. They are protected by the federal government against loss and are not insured by the FDIC.

D. A certificate of deposit (CD) at the bank: Certificates of deposit are insured by the FDIC up to $250,000 per depositor, per institution, in the event of bank failure. Therefore, CDs are protected by the federal government against loss.

In summary, A bond issued by one of the 50 states is not protected by the federal government against loss.