So I should take the one million dollars I have in one bank account and split it between four banks?
Not exactly.
FDIC offers up to $250K per named account holder for all accounts combined under an
account category.
One category is the Single Account -- meaning it's owned by one person. So, if you have checking, savings, a CD, Money Market and business account (held as a Sole Proprietorship) all under your name, then the aggregate coverage for those accounts' balances is limited to $250K via FDIC
But, if you hold accounts in the same bank in different account categories, they are separately insured, so insurance coverage would be more than the $250K FDIC limit.
The account categories are:
• Single Accounts
• Certain Retirement Accounts
• Joint Accounts
• Revocable Trust Accounts
• Irrevocable Trust Accounts
• Employee Benefit Plan Accounts
• Corporation/Partnership / Unincorporated Association Accounts
• Government Accounts
So, as long as you divide up your money into, say, a single account in your name and a joint account in your and your spouse's names, you'd have up to $500K of insured funds at a single bank.
https://www.fdic.gov/resources/deposit-insurance/brochures/documents/your-insured-deposits-english.pdfOf course, to be safe, using multiple banks might be wiser. If one bank goes under, it may take time to regain access to your money, whereas having multiple banks means even if one goes under, you still have access to your money in the other banks.