Your Cash Balance Is Earning What Your Bank Decides

A founder I work with had $1.8M sitting in her operating account for most of last year. She tracked burn weekly and was careful about every hire. What she didn't know was that her bank was paying her 0.01% on that balance while 3-month T-bills were yielding over 4%.

She lost roughly $72,000 to inaction. Not to a bad decision. To no decision.

What's actually happening

Most banks pay 0.01% to 0.10% on business checking accounts. That's not a rounding error. It's a deliberate product decision, and it benefits the bank.

Short-term rates are still meaningful. As of early 2026, money market funds and T-bills are yielding roughly 4.0 to 4.3%. High-yield business savings products from newer banking providers sit in the same range. The spread between what your bank pays you and what you can earn elsewhere is 40x or more.

For a company holding $1M in average cash, that spread is worth $40,000 a year. At $2M, it's $80,000. This isn't passive income. It's a finance decision you're either making or defaulting on.

Setting it up

You need two accounts and a rule.

Keep enough in the operating account to cover your next 30 to 45 days of expenses. Everything above that threshold moves to a separate account: a money market fund, a T-bill ladder, or a high-yield savings product, depending on your cash volatility and liquidity needs.

Sweep frequency matters less than you'd think. Weekly transfers work for most companies at this scale. Pick accounts that settle same-day or next-day so you're never actually illiquid. Mercury, Fidelity, and Brex all have products in this category. Your existing commercial bank relationship matters less here than the yield.

The question isn't whether your company is big enough to care about this. It's whether $40,000 a year is worth a two-hour setup. For most founders, it obviously is.

Why it keeps not getting done

Most founders don't have a finance person who owns this. Bookkeepers don't see it as their job. Banks won't raise it. So the balance stays on the default.

Liquidity risk is the usual objection. What if you need the cash quickly? Money market funds settle same-day. T-bills with less than 30 days to maturity are as liquid as cash for most purposes. Nothing is locked up.

Size is the second objection. Companies at $3M revenue assume this is a problem for later. The math doesn't agree. A $500K average balance at 4% is $20,000 a year. That's a month of payroll for a junior hire.

Set the threshold. Open the account. Move anything above it weekly. It takes an afternoon and runs itself after that.

She put the savings toward her next hire's salary. She stopped agonizing about whether she could afford it.