Deposit insurance is a financial protection scheme that safeguards depositors' funds in case a bank or financial institution fails. It ensures that individuals can recover a certain amount of their deposits, typically up to a specified limit, even if the bank goes bankrupt. This system helps maintain public confidence in the banking sector. In the United States, the Federal Deposit Insurance Corporation (FDIC) provides this insurance, covering deposits in member banks. Similar organizations exist in other countries, offering comparable protections. Deposit insurance plays a crucial role in promoting stability in the financial system by encouraging people to save and invest without fear of losing their money.