USA HISTORY

Detailed explanation-1: -The Banking Act of 1935 made the FDIC a permanent agency of the government and provided permanent deposit insurance maintained at the $5, 000 level.

Detailed explanation-2: -The FDIC protects the money depositors place in insured banks in the unlikely event of an insured-bank failure. Each depositor is insured to at least $250, 000 per insured bank.

Detailed explanation-3: -Federal deposit insurance became effective on January 1, 1934, providing depositors with $2, 500 in coverage, and by any measure it was an immediate success in restoring public confidence and stability to the banking system.

Detailed explanation-4: -The Banking Act of 1933 From 1929 to 1933, bank failures resulted in losses to depositors of about $1.3 billion. Before the FDIC was in operation, large-scale cash demands of fearful depositors often struck the fatal blow to banks that might otherwise have survived.