Where does the fdic’s reserve fund come from? a. the fdic has access to federal tax revenue. b. if an insured bank fails, the fdic keeps the money at that bank that is beyond the insured limit. c. a certain amount of money goes directly from the treasury to the fdic’s reserve fund. d. insured banks pay a premium on the money insured.

option: d is correct.

( d. Insured banks pay a premium on the money insured.)

Step-by-step explanation:

" The FDIC( Federal Deposit Insurance Corporation) receives no Congressional appropriations - it is funded by premiums that banks and thrift institutions pay for deposit insurance coverage and from earnings on investments in U.S. Treasury securities "

Hence, option: d is correct.

d. Insured banks pay a premium on the money insured.

The option d is correct.

The FDIC’s reserve fund come from the premium on the money insured.

Further explanation:

The FDIC reserve is created to ensure the deposits of individuals that are offered by banks and financial institutions. The FDIC reserve is set up to pay the money back that is lost when the bank or financial institution fails. The reserve is financed from the premiums received from the banks and financial institutions for deposit insurance and also from income received from the investments made in treasury securities.

Justification for the correct and incorrect

a.

The FDIC has access to federal tax revenue: This option is incorrect.

The FDIC does not have access to tax revenue, and tax revenue can only be used by the government to provide any service.

b.

If an insured bank fails, the FDIC keeps the money at that bank that is beyond the insured limit: This option is incorrect.  

If the bank fails, FDIC sells the loans and deposits of the failed bank or institution to other institution, and the customer of failed bank or institution become the customer of the other institution whom the deposits are sold.

c.

A certain amount of money goes directly from the Treasury to the FDIC’s reserve fund:  This option is incorrect.  

No amount of money is given by the treasury to the FDIC reserve. The income received from the investments made in treasury securities is the source of funds for the reserve.  

d.

Insured banks pay a premium on the money insured: This option is correct.

The reserve is financed from the premiums received from the banks and financial institutions for deposit insurance and also from income received from the investments made in treasury securities.

Learn more:

1. Amount insured in FDIC

2.     Learn more about the car insurance

3.     Learn more about the purchase and lease of the car

Answer details:

Grade: High School

Subject: Economics

Chapter: Banking

Keywords: FDIC’s reserve fund, the FDIC has access to federal tax revenue, if an insured bank fails, the FDIC keeps the money at that bank that is beyond the insured limit, a certain amount of money goes directly from the Treasury to the FDIC’s reserve fund, insured banks pay a premium on the money insured.