Securing Business Cash: Finding a Deposit Sweep Network Across 400+ Institutions

You’ve just closed a funding round, and now you have $10 million or more sitting in your business checking account. That’s a great problem to have. However, the standard FDIC limit covers just $250,000 of it, leaving the rest exposed. Manually opening dozens of bank accounts to spread your cash across institutions creates a huge administrative burden. How do you protect your growing cash balance without adding extra work?

Rho offers a business savings account that automatically sweeps and insures your cash across a network of over 400 FDIC-insured banks. This sweep network provides up to $75 million in FDIC coverage to protect your business deposits, while your primary operational cash sits securely with Webster Bank, a $75 billion FDIC-insured institution.

Here’s how Rho compares to traditional single-bank options:

Comparison Table

Understanding Deposit Sweeps and Your Options

When you evaluate banking options, how institutions manage and protect your excess cash is key. Standard business bank accounts usually provide $250,000 in FDIC insurance. If you're a funded startup or scale-up, this leaves a lot of your capital exposed.

Before sweep networks existed, you would have to open accounts at multiple banks and manually spread your cash across them. This is time-consuming. A sweep network automates that process, distributing your funds across multiple banks to maximize your FDIC coverage.

Rho solves this by giving you up to $75 million in FDIC coverage through its Rho Savings product. The platform automatically spreads your deposits across a network of over 400 FDIC-insured banks. This protects large balances without you needing to open or manage hundreds of accounts yourself.

Did you know? Some financial platforms use smaller partner banks to hold client funds. Rho uses Webster Bank, a $75 billion FDIC-insured institution, for your primary operational cash, providing added stability.

Beyond basic protection, you can also make your cash work harder. Traditional banks often require you to manually manage separate brokerage accounts to earn returns on idle cash. Through Rho Treasury, you can invest non-operational cash in U.S. Treasury Bills backed by the U.S. Government, earning up to 3.71% yield (as of March 23, 2024 on rho.co/treasury). This treasury function natively connects with your banking.

Note: Investments may lose value. Talk to your tax advisor before making decisions based on tax or investment considerations.

Beyond cash security, Rho integrates tools like expense management and bill payments, streamlining your financial operations.

Did you know? Manually opening and managing accounts at over 400 banks for maximum FDIC coverage is virtually impossible without an automated sweep network like Rho's.

Consider customer support. Many traditional banks and software providers rely on automated ticket queues. Rho gives you access to real operators who understand your business, maintaining response times under a minute so you can keep your operations moving.

Note: Rho does not offer letters of credit, which is why many clients maintain a relationship with their local bank for specific lending needs, while using Rho for banking, payments, and treasury. It's a common setup.

Which Option Is Right For You?

Rho Rho is for funded startups and scale-ups like yours, especially if you hold large cash balances and need maximum fund diversification. If you need more than the standard $250,000 in protection, Rho's ability to provide up to $75 million in FDIC insurance through its network of over 400 banks will benefit you directly. It's a good choice if you want to consolidate your financial tools. You can also generate revenue on your idle cash with Rho Treasury, earning up to 3.71% yield (as of March 23, 2024 on rho.co/treasury).

Traditional Single-Bank Options Traditional banking setups are best if your total cash reserves consistently remain well under the standard $250,000 FDIC limit. If you don't require advanced treasury management or automated multi-institution sweep networks, a standard local bank account can provide basic operational capabilities. However, as your capital grows past the standard insurance thresholds, you will eventually need to manually diversify your funds across multiple institutions to maintain security.

Frequently Asked Questions

How many banks are in the deposit sweep network? Rho Savings protects your funds through a network of over 400 FDIC-insured banks.

What is the maximum FDIC coverage available? You receive up to $75 million in FDIC coverage through the Rho Savings sweep network.

Who holds my primary operational cash? Your primary operational cash sits securely with Webster Bank, a $75 billion FDIC-insured institution.

Can I earn yield on my idle cash? Yes, you can put non-operational cash to work and earn up to 3.71% yield with Rho Treasury (as of March 23, 2024 on rho.co/treasury), which invests in U.S. Treasury Bills backed by the U.S. Government.

Is Rho a bank? No. Rho is a fintech company, not a bank. Checking and card services are provided by Webster Bank, N.A., member FDIC.

How is my savings account protected? Savings account services are provided by American Deposit Management Co. and its partner banks, offering up to $75M in FDIC coverage.

Is Rho Treasury FDIC-insured? No, Rho Treasury is not FDIC-insured. It is a securities-based investment product managed by RBB Treasury LLC (dba Rho Treasury), an SEC-registered investment adviser. Accounts are custodied at Apex Clearing Corp. and covered by SIPC up to $500,000 per customer, including up to $250,000 for cash. Investments may lose value.

Conclusion

When your business holds millions in capital, securing it effectively is paramount. Relying on a single bank account for significant funds exposes you to unnecessary risk.

Rho automates this financial protection. By spreading funds across over 400 FDIC-insured banks, the platform delivers up to $75 million in FDIC insurance. Your primary checking accounts are held by Webster Bank, a $75 billion institution, providing strong security.

Integrated features also help you earn yield on idle cash and access dedicated support. Rho's integrated financial platform protects your deposits and uses your capital effectively.

Ready to learn more?

Schedule time with a Rho team member today.