depositor protection

Depositor protection refers to the safeguards in place to ensure that individuals' savings in banks are safe, especially in the event of a bank failure. In many countries, government-backed insurance systems, like the Federal Deposit Insurance Corporation (FDIC) in the U.S., cover deposits up to a certain limit (e.g., $250,000 per account). This means if a bank goes bankrupt, depositors can recover their money up to that limit, helping to maintain confidence in the banking system and providing financial security for individuals.