Bank deposits are insured up to a certain amount by the Federal Deposit Insurance Corporation (FDIC)
The Federal Deposit Insurance Corporation (FDIC) was established in 1933 as a result of the great depression. Bank runs was one of the causes of the great depression.
The Federal Deposit Insurance insures bank deposits up to a certain point. The coverage limit is $250,000. Insurance by FDIC increases the confidence of depositors in banks. This is because they are assured that their deposits are safe even if their bank has a crisis.
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