Picture this: You've just closed a $2 million Series A round. After the champagne settles, you dutifully transfer the funds to your "high-yield" business savings account, earning a whopping 0.4% APY. Meanwhile, that same money could be generating up to 4%+ returns in equally liquid investments, potentially extending your runway by six months or more. If you're like most founders, you're leaving tens of thousands of dollars on the table every year.

The harsh reality is that traditional business banking is designed for convenience, not growth. While you're laser-focused on product development and customer acquisition, your hard-earned capital sits idle, barely keeping pace with inflation. But here's the thing: you don't have to choose between liquidity and returns.

The hidden cost of traditional banking

Most founders default to traditional business savings accounts because they feel safe and familiar. Banks market these accounts as "high-yield," but let's do the math. On $2 million earning 0.01% annually, you're making about $200 per year. That's barely enough to cover a single dinner with an investor.

Compare that to the current treasury return offered through Brex hovering around 4.19%†. That same $2 million could generate $80,000 to $100,000 annually in returns. We're talking about real money that could fund additional engineering hires, extend your marketing budget, or simply buy you more time to reach your next milestone.

The opportunity cost compounds quickly. Every month you delay moving to higher-yield options could cost you roughly $6,000 to $8,000 in forgone returns. Over a typical 18-month runway, that's potentially $150,000+ left on the table. Money that could make the difference between reaching profitability and having to raise in a down market. Which begs the question, where should you be investing your money?

Treasury bills: Maximum safety with real returns

T-bills are often considered the ideal for cash management - backed by the full faith and credit of the U.S. government. For founders who prioritize capital preservation but may need access to funds, they're worth understanding in detail.

Composition: Direct U.S. Treasury securities with fixed maturities ranging from 4 weeks to 52 weeks. These are backed by the full faith and credit of the U.S. government.

Risk: Safe if held to maturity, while earning returns. However, if you need to sell before maturity, you could lose principal due to mark-to-market pricing fluctuations.

Liquidity: You can sell T-bills early through secondary markets, but perhaps not at full value. Market conditions determine whether you'll get your full principal back if you need cash before maturity.

Conclusion: T-bills represent the standard for founders wanting safety. The 13-week maturity provides optimal balance of yield and accessibility for most startups, but remember - early exit could mean locking in a loss just to access your cash.

Ultra-short bond funds: Enhanced yields with market risk

These funds are often marketed as "cash-like" alternatives that may offer better yields than money market funds. While they can provide enhanced returns, it's crucial to understand what you're actually investing in and the trade-offs involved.

Composition: These funds invest in securities with maturities under two years, including commercial paper, CDs, short-term corporates, and sometimes asset-backed securities. Often misrepresented as "cash-like" despite their market exposure.

Risk: NAV fluctuates daily based on credit markets and interest rate movements. These are not principal-protected investments. Depending on market fluctuations, a fund could lose 1% in a week, turning a "4.5% yield" into negative real returns.

Liquidity: Technically daily liquidity, but if you sell when NAV drops, you realize a loss. Settlement usually takes a few days, and those advertised yields are often gross of fees.

Conclusion: Typically suited for businesses with larger cash positions who can handle some volatility for extra yield. Professional management handles the complexity, but understand you're trading safety for potentially enhanced returns.

Money market funds: The perfect middle ground

Many founders are drawn to money market funds because they seem to offer the best of both worlds - higher yields than traditional savings accounts with checking account-like accessibility. But as with any financial product, it's important to understand what's actually under the hood.

Composition: MMFs invest in short-term, high-quality debt securities like treasury bills and commercial paper. Government MMFs invest exclusively in treasury securities, while prime MMFs include high-grade corporate debt for potentially higher yields.

Risk: Low for government MMFs. NAV is designed to remain stable at $1.00 with no corporate credit exposure. Prime MMFs carry slightly more risk due to corporate debt holdings, but both prioritize capital preservation over yield chasing.

Liquidity: Most MMFs offer same-day or next-day access to funds. However, access restrictions may apply depending on your provider. With solutions like Brex, you can get same-hour liquidity while maintaining MMF yields.

Conclusion: MMFs can be a great middle ground for founders who want checking account liquidity with investment-grade returns. They're low-maintenance and automatically diversified, letting you focus on building your company while your cash works harder.

Making the switch: A practical roadmap

Start by calculating your true liquidity needs. Most startups need immediate access to 30-60 days of operating expenses, with the remainder of cash reserves available within 1-3 business days. This analysis helps determine the optimal mix of same-day liquidity (MMFs or sweep accounts) versus slightly higher-yield options (T-bills or ultra-short bonds).

Next, consider your time horizon. If you're 18+ months from your next funding round, you can afford slightly longer maturities for higher yields. If you're actively fundraising, prioritize maximum liquidity over the last few basis points of return.

Your business stage matters too. Platforms built specifically for startups understand these scaling challenges. Brex, for example, gives you the access to maximum earnings* with minimum risk, all with same-hour liquidity so you can get the best of everything. And it scales with you from seed funding through IPO, helping optimize your cash as business needs evolve. What works at $500K in the bank requires adjustment at $5 million, but better cash positioning often simplifies rather than complicates your operations.

Finally, don't let perfect be the enemy of good. Moving from a lower to a higher yield, even if not perfectly optimized, can offer an improvement in capital efficiency. The setup usually takes just a few hours, and most solutions require minimal ongoing management once established.

The bottom line for smart founders

Every day you leave significant cash in low-yield accounts, you may be missing opportunities to improve cash management efficiency and yield potential. In a world where every dollar of runway matters, optimizing your cash strategy isn't just smart finance. It's essential to startup survival.

The competitive landscape continues to intensify while fundraising environments remain challenging. Every month of additional runway created through better cash management improves your negotiating position and strategic flexibility. This operational efficiency compounds over time as your cash positions grow.

Modern financial platforms designed for startups make treasury optimization accessible without the complexity of traditional banking relationships. At Brex, we've helped thousands of founders spend smarter and earn more, while maintaining the operational flexibility their businesses demand. The question isn't whether you should improve your cash management, but how quickly you can implement these changes while maintaining focus on your core business priorities.

Brex intends to provide accurate information but cannot guarantee this content is current, correct, or complete.