The Federal Deposit Insurance Corporation protects depositors in which type of institutions?

The Federal Deposit Insurance Corporation (FDIC) specifically protects depositors in commercial banks, making this the correct choice. The FDIC was established to maintain public confidence in the U.S. financial system by insuring deposits, thus safeguarding consumers against bank failures. When depositors place their money in a bank that is insured by the FDIC, their deposits are protected up to a certain limit, ensuring that even if the bank were to fail, customers would not lose their insured deposits.

Other types of financial institutions, such as insurance companies, credit unions, and investment firms, do not fall under FDIC protection. While credit unions have their own insurance through the National Credit Union Administration (NCUA), investment firms are typically regulated and covered under different mechanisms, such as the Securities Investor Protection Corporation (SIPC). Insurance companies are regulated at the state level and do not receive FDIC insurance for their depositors. Thus, the role of the FDIC is distinct and focused on commercial banks, which highlights why this answer is the correct one in the context of the question.