Credits to Brad from the Neo Community # Operating Accounts: - Always maintain two operating accounts at different banks. One account can be the primary from where you run your company, while the other one is idle just in case of emergency situations. In an ideal world, you’d use both actively to maintain the good working relationships with both entities, but this is not always possible due to loan, Account Receivable Line or Line Of Credit restrictions. However, for now obvious reasons, you should never agree to a 100% exclusive relationship with one bank. - You must run your business in the best possible way, so don’t let the tail wag the dog. The quality of available banking services, costs, etc, matter for an operating account. Do you do FX? Do you do ACH at scale? Not all banks are good at servicing small commercial customers. - Your possible debt needs really matter as well, so will often drive the operating account choice. - You should never have excess cash in your operating account. Not at ANY bank. - Operating accounts are for day-to-day activities only, and act as a conduit to your other accounts below. # Daily Sweep Accounts: - Require your bank to set up a nightly sweep account, not for earning interest reasons, but for safety reasons.   - Most (maybe now all) banks offer what is called an ICS sweep account product or a version of it. ICS is a network run by a third party which basically facilitates spreading deposits around the wider banking system at night to maximize cumulative FDIC insurance. - As good as ICS may sound, do NOT rely on that alone for large dollar amounts if you have those available. - As a general rule, only keep around 3 to 6 months liquidity needs in the above two accounts combined. - If you still have material ‘excess’ cash of $10m+ above these two accounts, you need to open a managed securities account. # Professionally Managed Securities Account - This is the safest place to put your money, but it is not designed to be an operating account. - How does this work? You appoint an asset management team at a bank to manage a portfolio of very short term, highly liquid, US government securities on your behalf. There is a management fee cost to this, but it’s a minor cost for safety of holding US Government debt. Like any brokerage account, the securities are held at a third-party trust institution in your company’s name, not the bank’s name. - Your board needs to approve a treasury mandate under which the funds are managed. All the asset managers have draft docs available to you. - It is vital to focus the policy on capital preservation (credit) and liquidity (short duration). Do NOT be tempted to allow any risk for better yields with these funds in the policy. No start-up has ever succeeded because they maximized interest income on excess cash, but the opposite is unfortunately very true. - If you’ve set up the first two accounts correctly, instant same day liquidity in the securities account matter less, so you should not be interacting with this account very often.