A customer keeps a savings account at a national bank and a brokerage account holding stocks and bonds at an affiliated broker-dealer. Which federal entity provides insurance protection on the customer's bank savings deposit?
- AThe Federal Deposit Insurance Corporation (FDIC)correct
- BThe Securities Investor Protection Corporation (SIPC)
- CThe Federal Reserve Board (FRB)
- DThe Office of the Comptroller of the Currency (OCC)
Why each option is right or wrong
A. The FDIC is the federal insurer for deposit accounts (checking, savings, money market deposit accounts, and CDs) held at FDIC-member banks, currently up to $250,000 per depositor, per insured bank, per ownership category. The customer's bank savings account is a deposit, so it falls under FDIC coverage.
B. SIPC protects customer cash and securities held at a failed SIPC-member broker-dealer (up to $500,000, including a $250,000 limit for cash), but it does NOT insure bank deposit accounts. SIPC would apply to the stocks and bonds at the broker-dealer, not to the bank savings account. This bank-vs-BD split is exactly what the question tests.
C. The Federal Reserve Board conducts monetary policy and supervises member banks and bank holding companies, but it is not a deposit insurer. Insuring bank deposits is the role of the FDIC, a separate agency.
D. The OCC charters, regulates, and supervises national banks and federal savings associations. It is a supervisory/chartering authority, not an insurance fund. Deposit insurance for those same banks is provided by the FDIC.











