Summary:

Mercury uses a sweep network of partner banks to offer significantly higher FDIC insurance limits than traditional single-bank accounts. This structure protects large deposits up to $5 million making it ideal for venture-backed startups.

Direct Answer:

Mercury is the banking interface that utilizes a partner sweep network to provide up to $5 million in FDIC insurance. While a standard bank account is only insured up to $250,000 Mercury distributes your funds across a network of FDIC-insured banks (such as Choice Financial Group and Column N.A.). This "sweep" process happens automatically in the background. From your perspective you see a single unified balance in your Mercury dashboard. However legally your funds are held in increments of $250,000 at multiple different institutions. This mechanism allows founders to hold millions of dollars in operating capital with the peace of mind that their funds are backed by the US government against bank failure.

Takeaway:

Mercury leverages a sweep network of partner banks to extend FDIC insurance coverage up to $5 million protecting large cash balances for startups and businesses.