Initially, what was the FDIC insurance limit for deposits before it changed?

The correct answer is indeed $2,500. This amount represents the initial limit for Federal Deposit Insurance Corporation (FDIC) insurance on deposits established after the FDIC was created in 1933. The rationale behind this limit was to protect small depositors and to promote public confidence in the banking system during the Great Depression when many banks were failing.

Over the years, this limit has changed several times to keep pace with inflation and the evolving banking environment. The FDIC’s coverage limit was raised multiple times, reflecting the need to adapt to economic conditions and to protect depositors against potential bank failures. This foundational amount of $2,500 is significant in American banking history as it marked the beginning of insured deposit accounts, providing a safety net for people’s savings.