national deposit insurance

National deposit insurance is a government-backed guarantee that protects a certain amount of money in your bank account if the bank fails. Its purpose is to maintain public confidence in the financial system by ensuring depositors do not lose their savings unexpectedly. Typically, deposits up to a specified limit are insured; amounts above this may not be protected. This system helps prevent bank runs—when many people try to withdraw their money simultaneously out of fear—by reassuring depositors that their funds are safe, contributing to overall financial stability.