If products like this become widespread isn't it equivalent to 'tricking' FDIC into covering a higher % of your deposits? It appears this is more or less a service that takes your money and opens a lot of smaller accounts spread throughout all the different banks. Imagine that everyone did this. Now in the event of a medium scale bank default FDIC needs to cover not only the first 250k of a lot of people's money, but some multiple of that depending on how many banks that customer also had money in.
Doesn't this stress FDIC insurance as a system?
It seems to me it's counter to the intention of FDIC insurance in the first place (keep the small guy's money safe, assume the rich guy has plans to keep himself safe)
Doesn't this stress FDIC insurance as a system?
It seems to me it's counter to the intention of FDIC insurance in the first place (keep the small guy's money safe, assume the rich guy has plans to keep himself safe)