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.
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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.
- A small 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. Treasury management for small business owners is about yield with liquidity, not investment returns.
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Educational content, not tax, legal, or accounting advice. Confirm with a CPA before acting.
Frequently asked questions
How much cash should my business keep in checking?
A practical target is 60 to 90 days of average operating outflows in the primary checking account. Everything above that should sweep nightly into a government money-market fund or an FDIC-insured deposit network. Cash you will not touch for 12 or more months (a tax reserve, a sale escrow) is sometimes placed in laddered T-bills to lock in yield; discuss with your investment advisor.
What is the FDIC insurance limit for a business account?
The FDIC insurance limit is $250,000 per depositor, per insured bank, per ownership category, and a business account is no different. Deposits of a corporation, partnership, or LLC engaged in an independent activity are insured separately from the owners' personal accounts, but all of that entity's accounts at one bank combine into a single $250,000 bucket. A sole proprietorship instead combines with the owner's personal accounts.
How do I get FDIC coverage above $250,000 for business cash?
Use more than one bank, and consider a reciprocal or network deposit program such as IntraFi ICS or CDARS, which places the deposit across many member institutions in insured-sized pieces while you keep one relationship and one statement. Check whether your sweep moves cash into an insured deposit network or into a money-market fund, because only the first stays inside FDIC coverage. This is educational, not investment advice.
Do I need a treasury management system?
Most businesses under $20M in revenue do not. A written policy, two or three banking relationships, and the bank's own sweep and reporting tools cover the need. A treasury management system starts to earn its keep when you are running many accounts across several entities, need automated cash positioning, or have intercompany funding to manage daily. Until then, the discipline matters more than the software.
Are Treasury bills better than a high-yield savings account?
Often, after tax. T-bill interest is exempt from state income tax in most states, which improves the after-tax yield versus an HYSA or taxable money-market fund, especially in high-tax states. T-bills also carry the government's full backing with no FDIC ceiling. HYSAs win on simplicity and instant liquidity. Many owners use both: HYSA for near-term cash, laddered T-bills for longer-tenor reserves.
Are money-market funds safe for business cash?
Government money-market funds (holding short-duration government paper) are commonly used for treasury cash and track the Fed funds rate closely. The mistake to avoid is chasing an extra fraction of yield into prime funds or private cash-management platforms that add credit or liquidity risk to what should be a boring allocation. Yield with liquidity is the goal, not investment returns.
What is a sweep account and do I need one?
A sweep automatically moves excess cash from checking into a money-market fund or an FDIC-insured deposit network every night, and moves it back when checking runs low. It captures yield on idle balances with zero ongoing effort. If your business regularly holds six figures beyond its operating needs, a sweep is usually the first and easiest treasury fix. This guide is educational, not investment advice.
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