The Fed wants to enforce fractional reserve lending, therefore they won’t permit a Narrow Bank (which takes deposits and holds them solely in treasuries). If the government provided unlimited insurance for deposit accounts, the thought goes it encourages excessive risk taking on the part of financial institutions.

Long story short, you’re caught up in monetary policy. To mitigate these risks, you can use deposit accounts that sweep across multiple banks to get the cash insurance you need, and your finance/treasury department can invest the rest in short dated treasuries (which are backed by the Federal Reserve with no limit, and are considered risk free) or money market funds which contain only these same securities.

https://en.wikipedia.org/wiki/Certificate_of_Deposit_Account...

https://www.chicagobooth.edu/review/safest-bank-fed-wont-san...