In banking terminology, the term deposit protection refers to insurance given to depositors by a government regulating agency in the event of the failure of the financial institution where the deposits are held. deposit protection is also known as deposit insurance.
For example, deposit protection is extended to depositors in the United States by the Federal Deposit Insurance Corporation or FDIC and in the UK by the Financial Services Authority or FSA. In the United States, the FDIC member banks and financial institutions insure deposits up to $250,000 per account and per member bank for each of its account categories, and the FDIC claims to be backed by the full faith and credit of the United States. This type of protection is also extended to depositors in many other countries, with the specific terms depending on the nation where the accounts are held, the type of account and the amount of deposit held per account.