3 min read
2025-07-06
$250K FDIC default isn't enough for any multi-location practice. Two compliant ways to bridge to $10M, plus the popular bad ideas to ignore.
$250K is the FDIC default. $10M is what most multi-location practices actually need. Two ways to bridge the gap. Both legal. Both fast.
The Two Paths
There are exactly two compliant ways to get past $250K:
A sweep network like IntraFi Cash Service
Multiple legal entities, each with its own coverage
You can use either. Most multi-location practices use both.
Path 1: A Sweep Network
A sweep network splits your deposit into $250K slices and places each slice at a different FDIC-insured bank. The whole thing stays insured. You see one balance and one statement.
What this gets you:
Up to $10M FDIC per entity
One login, one operating workflow
No legal restructuring
Set up in days, not months
This is the fastest fix. Ask your bank if they offer IntraFi Cash Service. If not, switch.
Path 2: Multi-Entity Stacking
Each legal entity is a separate depositor. Each gets its own $250K, or $10M with a sweep network.
Real-world stacking math:
1 PC + sweep network: $10M coverage
2 PCs + sweep network: $20M
A 5-PC dental DSO + an MSO + sweep network: $60M
This is why MSO-PC structures naturally extend coverage. Not the original purpose, but a useful side effect.
When You Need This Most
Most groups don't think about FDIC limits until they cross a milestone:
After a clinic sale or PE buyout, when proceeds park briefly
When a CD or capital reserve matures and gets redeposited in one place
During year-end, when collections pile up before bonus and tax distributions
After a bank failure makes the news and the partner emails the CFO at 9 a.m.
If any of these are about to happen, set up coverage before, not after.
How to Verify Your Coverage
Don't take a salesperson's word for it. Ask in writing:
What's my insured balance per entity, today?
Which network are you using (IntraFi, R&T, or other)?
What happens if a destination bank fails?
Where do I see the destination breakdown if I want it?
A bank that can't answer these in writing isn't a bank you should trust with $10M.
What to Ignore
Some popular bad ideas you'll hear:
"Just put it all in Treasuries." T-bills are safe but they're not FDIC-insured. Different protection, different liquidity.
"Buy a money market fund." Not FDIC-insured. Can break the buck (rare, but it's happened).
"Spread money manually across 40 banks." Operationally a nightmare. You'll forget one and overshoot.
"Use multiple accounts at the same bank." FDIC limits aggregate at the bank level. Multiple accounts at one bank still cap at $250K.
The only durable answers are sweep networks and entity structures. Everything else is a workaround.
Quick Start
If you have over $250K parked anywhere, do these this week:
List total cash by entity, by bank
Identify everything above $250K per (entity, bank) pair
Ask your bank about a sweep network. If they don't offer one, get a quote from a healthcare-native bank
Move excess balances within 30 days
Lemma offers $10M FDIC per entity through IntraFi as a default. No minimum balance, no extra paperwork.
$10M FDIC isn't a luxury. It's table stakes for any practice past $250K. The question isn't whether you need it. It's whether your bank is making it easy or impossible.
FAQ
Common questions