The Federal Deposit Insurance Corporation is a federally subsidized US organization that provides insurance for bank deposits, currently up to $250,000. By insuring bank deposits, the FDIC encourages confidence in the United States financial system.
The Glass-Steagall Act of 1933 created the FDIC. Along with insuring bank deposits, the FDIC inspects and oversees financial organizations for security and reliability, performs consumer defense functions, and manages failed banks. Premiums that banks and thrift organizations pay for deposit insurance coverage and earnings on investments in the United States treasury securities fund the FDIC.