Which organization insures eligible deposits at U.S. banks and was created by the Banking Act of 1933?

The Federal Deposit Insurance Corporation, or FDIC, insures eligible deposits at U.S. banks and was created by the Banking Act of 1933.

Congress established the FDIC during the banking crisis of the Great Depression. Its purpose was to strengthen confidence in the banking system by protecting depositors if an insured bank failed. The FDIC began permanent deposit-insurance operations in 1934.

Coverage applies to eligible deposit products at participating institutions, subject to statutory limits and ownership categories. Checking accounts, savings accounts, certificates of deposit, and certain other deposit accounts can qualify, while investments such as stocks and mutual funds do not receive FDIC insurance.

The FDIC is different from the Federal Reserve, which conducts monetary policy and provides other banking-system functions. Credit unions generally use separate federal or state insurance arrangements rather than FDIC insurance.