My question is, why would anyone have more than $100,000 in a savings or checking account for an extended period of time? Inflation will eventually get you long before a banking crisis does.

Where should one keep that sort of money? Buried in the backyard? In gold bars in a safe deposit box? Having money spread out among several banks in high yield savings accounts makes good sense.

Besides, you can live off the yearly interest of a substantial savings account. That's about the only time the savings accounts really start to earn money. You let the banks play with your money, which spurs community/local growth and investment while one lives off the 3.5 percent - more if you can personally negotiate a rate with a particularly large deposit.. Investment funds can be put in money market accounts with substantially greater yield, but you can't cash those in without early withdrawal penalties.

For example let's say Melinda Gates has $10,000,000 in 2 different high yield accounts. After the first year, she can withdraw up to $350k a year and never make a dent in her account balances. She can have multiple debit cards linked to the account so that she never pays interest for card purchases. She never has to carry cash. That's convenient, more secure, and in the long haul also makes her money go farther.