Deposit Insurance

A

The correct answer is A. Deposit Insurance.

Deposit insurance is a type of insurance that protects funds on deposit in a financial institution against the risk of the institution's failure. Deposit insurance is offered by government agencies such as the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA).

The FDIC is an independent agency of the federal government that was created in 1933 in response to the bank failures during the Great Depression. The FDIC provides deposit insurance to depositors in U.S. banks and thrift institutions. The insurance protects depositors against the loss of their insured deposits if an FDIC-insured bank or savings institution fails. Currently, the FDIC insures deposits up to $250,000 per depositor, per insured bank, for each account ownership category.

The NCUA is an independent federal agency that regulates and insures credit unions in the United States. Credit unions that are federally insured by the NCUA must display the official NCUA insurance sign at their place of business. Like the FDIC, the NCUA provides deposit insurance up to $250,000 per depositor, per insured credit union, for each account ownership category.

Demand deposit and time deposit are two types of deposits offered by financial institutions. Demand deposits are funds held in checking accounts that can be withdrawn at any time, while time deposits are funds held in savings accounts that are subject to a maturity period and generally earn a higher interest rate than demand deposits. Money market mutual funds are investment products that invest in short-term debt securities, such as commercial paper and Treasury bills, and are not insured by the FDIC or NCUA.