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This isn't a single user, FDIC insurance is for $250k per user per bank. The point is that for regulated banks that number is clear and if you exceed it you will be aware of it, and if you haven't exceeded it you have a federal guarantee to recover your money. What assurance does anyone have in this case?

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People do not understand what FDIC insurance is.

It protects again bank failure. If the one's assets are drained from the bank, as long as the bank has not failed, it will have to make the account holder whole.

That's why a company would be stupid to hold $200M at Podunk Bank of Littletown, KS but is perfectly fine to hold it in a DDA account at Bank of America, Citi or Chase

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