Which of the following is NOT covered by FDIC insurance?

The choice of mutual funds as the option not covered by FDIC insurance is correct because FDIC insurance specifically protects deposits made at insured banks and savings associations. This includes accounts like checking accounts, savings accounts, and certificates of deposit, which are all considered deposit accounts.

Mutual funds, on the other hand, are investment products that pool money from multiple investors to invest in various securities like stocks and bonds. They are not deposits but rather managed investment vehicles, and thus they do not qualify for FDIC insurance. Investors in mutual funds are subject to the risks of the market, including the possibility of losing money, which is not the case for insured deposit accounts where the principal amount is protected up to the insurance limit.

Understanding the distinctions between these categories helps consumers make informed decisions about where to invest their money and what protections are available.