What Do You Do With Your Reserve Cash Flows?

As a startup grows, it needs to keep cash on hard, either acquired from investors or from its own revenue. The cash on hand sits ready to be put to work in case there is a need.

As the cash on hand requirement grows, it becomes painful to watch a sizeable amount (>$100k) of cash sitting in a non-interest bearing bank account. In this post, I’m seeking practical suggestions for what to do with cash on hand.

I’ve looked around for interest bearing checking or savings accounts. The best one I found is Bank on CIT, which only allows personal accounts. The interest rate is currently close to 1% there. It takes around 1 week to withdraw money from the account, but it is fluid enough for most situations. There is no penalty for withdrawing money from the account – everything is pro rated.

For single owner startups, Bank on CIT is a good option. But because of the personal account nature, it is not ideal for other types of startups.

Do you have other solutions for making interest on the money in your cash on hand reserves?

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