Which entity provides insurance for cash deposits held at banks?

The Federal Deposit Insurance Corporation (FDIC) is responsible for providing insurance for cash deposits held at banks. This federal agency was created to maintain public confidence in the U.S. financial system by protecting depositors in the event of a bank failure. The FDIC insures deposits up to $250,000 per depositor, per insured bank, which significantly mitigates the risk for individuals and businesses keeping their money in banks.

The other entities mentioned, while important in their respective domains, do not provide this particular type of insurance. The Internal Revenue Service (IRS) primarily deals with tax collection and enforcement of tax laws. The Securities Investors Protection Corporation (SIPC) protects customers of brokerage firms in case of firm bankruptcy, focusing on stocks and other securities rather than cash deposits at banks. The Securities Exchange Commission (SEC) regulates securities markets and protects investors, but again, it does not insure cash deposits in financial institutions. Understanding the distinct roles of these organizations is crucial in recognizing the specific financial protections they offer.