[ChickenNugger]

Am I the only one wondering why they're allowed to circumvent the $250K cap like this?

Presumably there's a cap for a reason, and presumably it's to protect ordinary Americans who rarely have $250K in assets, and not rich people who can literally afford to lose that much and still be rich.

[kentonv]

No, this is exactly what's supposed to happen. The FDIC wants large depositors to spread their deposits over many banks as this reduces overall risk. The limit is not about protecting "ordinary Americans" over "rich people".

[baq]

The cap is designed to be circumvented in this way. You don’t game the system, if you think so, the system games you.

[altdataseller]

Based on the description of what they do, how is that circumventing? You can do the same thing they're doing by depositing into multiple banks too. The only difference is that Mercury is the custodian, and doing it for you

[piperswe]

It's not circumventing the cap. If one bank fails, there's only a $250k insured loss, which is exactly the FDIC's goal with the cap