Use sweeping firm to handle multiple banks, don't worry about it, ?

Do business that revolve millions of dollars go through the trouble of multiple accounts? If they do, I'd that common?

Corporations and high net worth clients often use Treasury services. These are cash management and short term reserve programs. Waterfall programs, various fixed income with a lot of care given to liquidity and duration are core pieces along with a deep and ongoing understanding of cash-flow needs and contingencies to make sure the system is well optimized.

Part of these programs is managing FDIC exposure, but that is just a small part of properly managing liquidity.

Some advisors, self-included, provide these services as a loss leaders for potential clients and more often as a courtesy service to existing clients that are the owners of a business or CEO/CFO/VP of finance in larger corporations.

CDARS ?

I think a lot of ultra wealthy people hold (and roll) short term treasuries instead of holding massive amounts of straight cash.

Not sure how they do it now, but one of my audit clients 20+ years ago was Methodist Hospital of Dallas. They had a significant amount of funds that they had to keep held in FDIC insured accounts. Their Treasurer had a large spreadsheet with banks all over the country holding balances. If I recall, most were CDs. It was nuts. We'd have to confirm a decent sized sample

Merrill has an FDIC-insured account with unlimited deposits. All of your cash is in one account, the money is divided amongst banks across the country with no bank getting more than the FDIC limit. The banks are listed in the prospectus but you don't really know which bank has how much.

DannyDuberstein said:

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Not sure how they do it now, but one of my audit clients 20+ years ago was Methodist Hospital of Dallas. They had a significant amount of funds that they had to keep held in FDIC insured accounts. Their Treasurer had a large spreadsheet with banks all over the country holding balances. If I recall, most were CDs. It was nuts. We'd have to confirm a decent sized sample

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Why did they "have to" keep it there? Any idea? Bylaws of the organization or rules from the Methodist governing body?

Most brokerage accounts at major brokerage firms have FDIC limits up to $2.5m per individual.

I think FDIC insurance is looked at with far too much respect. I thought this before the SVB collapse and still do today. You can use a credit union money market account, earn 2% with FDIC insurance, or you can find a money market fund paying north of 4.50% that has zero FDIC insurance and invests solely in US Treasuries.

It's really not a big deal as long as you aren't talking umpteen accounts. It's damn easy to open an online savings account with any number of institutions and manage it assuming you aren't trying to flow cash every day all over the place.

We just have four cash accounts and I don't really even think about it. If we had >10 then maybe it becomes an issue, but even with that many it's not that big of a deal with financial aggregation software these days.

Hell, we have close to fifty different accounts flowing into Tiller right now that I keep tabs on. Now, if I didn't have software to manage that? Nightmare.

An easy way to handle it is to buy treasuries. Then open a line of credit secured by the treasuries.