So essentially what you're saying is people should open a new account for every $250k they have, so their money is insured. Insane that this is something that people now need to worry about.
OP mentioned that there might be a service for that, and potentially also insurance that you can take out yourself for higher amounts.
> Insane that this is something that people now need to worry about.
Always has been, that is if you were just somewhat risk averse - more than one (unrelated!) bank account has always made sense.
FWIW, here in the EU we're only covered until 100k €, so 2.5 times as many banks required to spread safely ;-P
But, a lot of people do not need to have the cash around all the time, so one can but a big amount into relatively safe securities like S&P500 or for lower risk, which might be preferred here, gov bonds, and keep only the cash on hand for a few months of your expenses, which means most of the time two banks are enough, and having an account on two unrelated banks makes sense anyway - as if one has a bank run or fails completely you have still access to the cash on the other, for short-term things.
For companies this can work too, but they need a constant revenue stream matching their normal monthly expenses (e.g., salaries, office rents, ...) for it to work best.
Call me crazy but I think a company with this much financial holdings would normally have a CFO that buys bonds that vest at the right times, and would have cried a tiny tear at getting less than ideal interest rates on them instead of having a bank collapse with all their finances because it wouldn't be competitive at recruiting more clients with zero financial management going forward.
Perhaps decades of no inflation and low interest expectations have left people confused to the fact that when you have millions you are an investment holding company.
It’s abstracted away from you and trivial to do. These startups just didn’t do it.
https://www.fdic.gov/resources/deposit-insurance/brochures/i...
For this in particular:
>> "The FDIC insures deposits that a person holds in one insured bank separately from any deposits that the person owns in another separately chartered insured bank. For example, if a person has a certificate of deposit at Bank A and has a certificate of deposit at Bank B, the amounts would each be insured separately up to $250,000. Funds deposited in separate branches of the same insured bank are not separately insured."