Insurance Account for Protecting Funds on Deposit

A

The correct answer is A. Deposit insurance.

Deposit insurance is a type of insurance account that protects funds on deposit against the failure of the institution. In the United States, this insurance is typically provided by the Federal Deposit Insurance Corporation (FDIC) for banks and the National Credit Union Administration (NCUA) for credit unions.

The FDIC is an independent U.S. government agency that provides deposit insurance to protect depositors in case a bank fails. The NCUA is a similar agency that provides deposit insurance for credit unions.

If a bank or credit union fails, deposit insurance ensures that depositors will receive their funds up to a certain amount, usually $250,000 per depositor per insured bank or credit union. This means that even if the institution fails, depositors will not lose their money.

Deposit insurance is important because it helps to protect consumers and promote confidence in the financial system. By providing a guarantee that deposits will be safe, deposit insurance encourages people to deposit their money in banks and credit unions, which in turn helps to fuel economic growth.

In summary, deposit insurance is a type of insurance account that protects funds on deposit against the failure of the institution, and can be insured by FDIC and NCUA.