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You don't "sock away" more than a quarter-million in one institution (but that was sound advice long before the current financial crisis). As the FDIC is fond of saying, "No customer has ever lost a single penny of insured deposits."
Many small businesses run close to the bone, and don't have six-figure sums stockpiled at the bank. For those that do, the risk of a bank failure remains remote: Washington Mutual (WM, Fortune 500) was the 13th bank to fail this year, out of 8,500 banks in the U.S. The FDIC had 117 banks on its watch list at the end of last quarter, representing a small sliver of the industry.
If your bank does fail, though, it can take with it a sizable portion of your operating cash, if what you have stashed exceeds insured limits. When NetBank went under in September 2007, it held around $800,000 for Applied Cognetics, a four-year-old software development firm in Brooklyn, N.Y. The FDIC quickly repaid depositors for 50% of their uninsured balances, but Applied Cognetics was left for months short several hundred thousand dollars.