Deposit insurance is a safety net provided to protect depositors' funds in the event of a bank failure. This system maintains public confidence in the banking system by ensuring that depositors' money is safe up to a certain limit, even if their bank ceases operations. It is typically offered by a government agency or a privately-operated insurance fund.
Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.