Final answer:
The Federal Deposit Insurance Corporation (FDIC) is the government agency that guarantees depositors will receive up to $250,000 of their money if a bank fails. This system was established to prevent bank runs and has protected depositors since the 1930s, with no losses of insured deposits.
Step-by-step explanation:
The government agency responsible for protecting your money in a bank, up to a certain limit, even if the bank closes is the Federal Deposit Insurance Corporation (FDIC). This system of deposit insurance was established in the United States in the 1930s to prevent bank runs and offer security to depositors. Banks pay a fraction of their deposits to the FDIC, which maintains a fund to cover insured account balances up to $250,000 per depositor, per insured bank, for each account ownership category. The coverage was increased from $100,000 to $250,000 in 2008, safeguarding individuals and providing enough coverage for most depositors, though it may not be sufficient for many businesses.
Bank examiners from the FDIC regularly evaluate the balance sheets of banks to assess their risk level. As of the third quarter of 2021, the FDIC ensures deposit insurance for around 4,914 banks. It's important to note that since the institution of this deposit insurance, no depositor has lost any insured funds.