What is NOT included in FDIC insurance coverage?

The correct answer is that mutual funds are not included in FDIC insurance coverage. FDIC insurance primarily protects depositors by covering funds held in accounts at insured banks or savings associations, specifically ensuring the safety of deposit accounts. This includes various types of deposit accounts such as checking accounts, savings accounts, and certificates of deposit (CDs).

Mutual funds, on the other hand, are investment products that pool money from multiple investors to purchase securities. Since they involve investment risks and fluctuations in market value, they are not covered by FDIC insurance. Instead, mutual funds are typically regulated by the Securities and Exchange Commission (SEC) and are subject to different types of risks associated with the securities in which they invest. Therefore, while the safety of bank accounts is a priority covered by the FDIC, mutual funds do not carry the same insurance protections, making this the correct distinction in the question.