Fractional CFO

Cash and Treasury Management for Owners and High-Net-Worth Individuals

How to think about idle cash across sweeps, money-market funds, high-yield savings, and Treasury bills. FDIC stacking, when to use each vehicle, and a simple operating policy.

By Harry Prabandham5 min · 5 slidesUpdated July 22, 2026

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Why This Matters Now

Cash yields moved from near zero to 4–5% over the last few years. Idle cash in a checking account is now a real, quantifiable cost.
An owner-led business or individual sitting on $1M in a checking account is leaving roughly $40,000 to $50,000 of annual yield on the table.
The 2023 SVB event reminded every owner that FDIC limits are not theoretical. A single-bank concentration is a real risk you can eliminate cheaply.
The right cash structure is boring and repeatable, not clever. The goal is yield with liquidity, not investment returns.

The Four Vehicles to Know

Sweep accounts: nightly automated transfer of excess cash from checking into a money-market fund or FDIC-insured deposit network. Zero operational burden, decent yield.
Money-market funds (MMFs): mutual funds holding short-duration government or prime paper. Yields track the Fed funds rate closely. Government MMFs are the standard for treasury cash.
High-yield savings accounts (HYSA): FDIC-insured, typically 4–4.5% at online banks. Slightly lower yield than a government MMF but simpler tax treatment.
Treasury bills: direct purchase of 4-week to 52-week T-bills via TreasuryDirect or a brokerage. Full government backing, exempt from state income tax on the interest.

FDIC Stacking

FDIC covers $250,000 per depositor, per insured bank, per ownership category. Multiple banks multiply the coverage.
Different legal entities are separate depositors. Business LLC, owner personally, spouse personally, and a trust each get their own $250,000 at the same bank.
Programs like IntraFi ICS and CDARS spread a large deposit across many member banks while keeping the whole balance FDIC-insured and reporting on one statement.
T-bill and government-MMF holdings carry the government's full backing outside the FDIC framework — the practical protection is stronger than FDIC's limit.

A Simple Operating Policy

Target minimum operating balance: 60 to 90 days of average operating outflows sits in the primary checking account.
Excess above that target sweeps nightly into a government money-market fund or an FDIC-insured deposit network.
Long-tenor cash (12+ months, e.g., a tax reserve or a business-sale escrow) goes into a laddered T-bill portfolio to lock in yield without duration risk.
Cap total exposure to any single bank at 2× FDIC limits per ownership category — force diversification even when it feels excessive.
Require dual approval on outgoing wires above a threshold ($25,000 or $50,000 depending on volume).

Common Owner and HNI Mistakes

Leaving 100% of business cash at one bank because 'we've always used them' — solvable in an afternoon with a second bank.
Chasing yield into non-government MMFs or private cash-management platforms that add credit or liquidity risk to what should be a simple treasury allocation.
Not coordinating personal and business cash — the same owner will optimize one and ignore the other.
Ignoring the tax treatment: T-bill interest is state-tax exempt in most states, which changes the after-tax comparison versus a taxable MMF.
Rubric Financial builds treasury policies and executes the setup as part of CFO engagements — it is one of the highest-ROI early wins.

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Educational content — not tax, legal, or accounting advice. Confirm with a CPA before acting.

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