Full-Reserve Banking

This is an intriguing idea. Obviously, there are various cost trade-offs to have more security. For example 'free checking accounts' can't be free if the bank can't rent out some of the cash to cover the costs of operating the account.

I think there would be demand for a retail bank offering products with various blends between cost (or interest paid) and liquidity. The reality is that "cash" in checking accounts isn't really cash because banks can't redeem too much, too quickly. Basically, banks are profiting in a non-transparent way by "overselling" their liquidity capacity the same way airlines oversell their seats. Both are betting that not everyone will show-up / cash their account at the same time. Usually, this works out fine – until it doesn't.

The lack of transparency can be solved by making the unstated assumptions of the bank explicit up front to customers. For example, "with this checking account you aren't allowed to withdraw more than 50% in any 30 day period. In exchange the account pays the 30-day T-bill rate on half the funds." Seems like an area ripe for product innovation. I even know some people who are risk intolerant to the extent they'd probably pay a meaningful uplift for a full-reserve checking account.

Request for startups: a bank that doesn't gamble ("invest") with your deposits.