Missing: If the promised interest rate is higher than the market rate for bank accounts, there is an implied risk of default, in which case you would likely lose your entire investment.
Not missing.
“ The cash portion should be kept in a money market fund investing only in short-term U.S. Treasury securities, so that you don’t have to evaluate credit risk. These securities are safer than bank accounts”
The funny lesson I got from SVB was why bother putting cash in a bank when they're just going to put it in treasuries, MBSes, etc. It's not exactly insured, but a short-term government money market fund seems safer, or a state muni fund if you're worried about the federal government defaulting.
In general, banks are set up to deliver consumer services that brokerages are not. However, in these days where treasury funds have ~5% interest rates, it makes sense to keep checking account balances at a level that they have a comfortable buffer for your preferences but no higher.
I see my brokerage makes the case for maybe not needing a separate bank. Which may be true at this point. On the other hand having one doesn't really cost me much and would probably be a bit of a pain to change.
