FTCE Subject Area Practice Test 2025 – Comprehensive Prep Guide

The Federal Depository Insurance Corporation (FDIC) is the institution responsible for insuring depositors' money in the United States. It was established in 1933 to provide stability and confidence in the American banking system by protecting depositors against losses due to bank failures. The FDIC insures deposits in member banks, up to a standard amount, ensuring that even if a bank fails, depositors can recover their insured funds.

In contrast, the Federal Reserve serves as the central bank of the United States and focuses primarily on monetary policy, regulating banks, and providing financial services, rather than directly insuring deposits. The Consumer Financial Protection Bureau (CFPB) is dedicated to protecting consumers in the financial sector, but it does not provide deposit insurance. Bank of America is a financial institution that offers banking services, but it is not an insurer of deposits; rather, it is subject to FDIC regulations and protections for its depositors.