Schwabs checking accounts are FDIC insured up to $250K. But to be clear a bank run on Schwab isn't happening. They have 7.13 trillion USD in Assets Under Management. And I am certain it isn't all in low-yield bonds.
The question is where they’re investing the float.
Investments of float accounts for a big proportion of brokerage profits (along with payment for order flow):
> 57% of Schwab’s revenues are from net interest. The firm could literally give away every other service; discount the mutual fund fees to zero, do away with commissions, etc etc, and they would still be profitable.
> Schwab isn’t even the leader among discount brokerages in dependence on net interest. That would be E*TRADE, at about 67% of revenues. Interactive Brokers makes 49% and TD Ameritrade 51% in the segment.
https://www.kalzumeus.com/2019/6/26/how-brokerages-make-mone...
Stock trading commissions in USA for a while have basically been a scam and it’s only because Robinhood came along that that source of revenue is gone to $0. That might result in more risk-taking on the float side.