Whats that about a fool and their money easily parted? Why yes, chasing the highest return IS a good way to come unstuck. What do you think those extra points of interest were held back for in the first place?
Definitely not FDIC insurance.
A "Capital One 360 Performance Savings" account gets 4.25% APY with full FDIC coverage.
A "Capital One 360 Savings" account gets like 0.2% APY with full FDIC coverage.
Clearly they don't actually need to eat 4% APY in order to get FDIC, or else the first type of saving account would be a bad one to offer.
Anyway, the FDIC is a promise from the government that they'll cover your cash, and so is a treasury. Treasuries and FDIC insurance both have roughly the same risk, which is that of the US government collapsing entirely.
I recommend you do some reading to learn more about it.
if us treasury fails the last thing im worried about is my my bank okay
The risk of e.g. Vanguard doing this is also probably negligible.
Although, I would suggest to buy the treasuries directly and not pay a fee to any fund.
I prefer Treasuries in my taxable accounts as there is a break on State taxes for the interest generated. I hold CDs in my non-taxable retirement accounts as they tend to pay a few tenths of a percent higher.
FDIC is to make the unsophisticated comfy with parking their savings for pitiful rates at commercial banks making the spread. Their margin is your opportunity.
It's hard to say what the outcome of such a move would be, but one possibility is Treasuries taking a large haircut, but without triggering the sort of collapse that would swallow FDIC along with everything else.