What is the purpose of the FDIC?

The purpose of the Federal Deposit Insurance Corporation (FDIC) is to provide insurance for deposits made to banks and savings institutions. This insurance guarantees that if an FDIC-insured bank fails, depositors will be reimbursed up to a certain limit, which is currently $250,000 per depositor per insured bank. This safety net helps to maintain trust in the financial system, reassuring consumers that their money is secure even in the event of a bank failure.

While other institutions may regulate stock exchanges, provide loans for small businesses, or offer financial advice to consumers, these functions do not fall under the primary mission of the FDIC. The FDIC's focus is primarily on protecting depositors and ensuring stability within the banking system, which is why the correct answer centers on the guarantee of savings bank deposits.