In theory FDIC only covers the $250k but in recent years these bank wrappers have gotten a little bit more clever and abstracted it away by distributing holdings across multiple partner bank accounts:
https://www.getevolved.com/openbanking/fdic-insured-sweep-pr...Mercury is the provider I know who does this (in partnership with Evolve, as the link indicates) but I think there are others as well.
