Quora Answer: How Does One Deposit $100 million in Cash with Insurance, Given That the FDIC Only Insures Up to $250,000 per Account?

The following is my answer to a Quora question: “How does one deposit $100 million in cash with insurance, given that the FDIC only insures up to $250,000 per account?  Without opening a great many accounts, is there a way to insure larger amounts of your money in banks?”

The FDIC is for retail customers of the banks.  They are unlikely to have such a large sum of money in an account, let alone several.  If you have US$100 million, you are no longer a retail customer.  In fact, it would be unlikely that you would have US$100 million in cash.  That would put a lot of cash out of circulation, and create a liquidity crunch.  That is not going to happen.

Also, US$100 million in cash is extremely unsafe, and volatile.  You are open to currency exposure and subject to massive losses in purchasing power due to inflation.  No sane investor keeps that sort of cash.  If you mean cash equivalent, that would more likely be money market, short-term sovereign bonds, and commercial paper.  You do not deposit all of that in a bank account.  It would be spread over several investment accounts.

For such a sum, the bank will assign you a personal senior investment banker to advise you on how to spread the risk, and invest your funds, diversifying the portfolio across several asset classes.  That is your insurance.  The bank will also give you free risk assessment, and you can buy insurance specific to asset classes, or even insurance as financial instruments.