Where Your Cash Should Actually Sit

Ask a founder how much runway they have and you'll get a number. Quick. Confident. Usually in months.

Ask the same founder where that cash physically sits and the answer slows down. "Mercury, I think. Or the Chase account. Some of it's in a savings thing."

Some of it's in a savings thing. That's the sentence.

Runway tells you how long. It doesn't tell you where.

Most founder finance advice is about the size of the pile. Almost none of it is about the shape of the pile: how much needs to be reachable by Friday's payroll, how much can sit still, and how much attention any of it deserves.

Here's the part nobody wants to hear. You don't have much of a buffer to arrange in the first place. JPMorganChase's analysis of 2.1 million small businesses found the typical firm held 17.6 cash buffer days in 2025, meaning about two and a half weeks of average outflows if inflows stopped entirely. And a Bluevine survey of 774 business owners (September 2025) found 39% had less than one month of operating expenses in cash.

So this isn't a treasury problem. It's a triage problem.

Three buckets, no bond trader required

Finance pros have a boring answer, and boring is the point. Split the cash by job.

Bucket one is operating cash. It pays payroll, rent, and the vendor who will absolutely call you. It stays instantly accessible, in the account your business actually runs on, and it earns whatever it earns.

Bucket two is the reserve. A common rule of thumb is 60 to 90 days of operating expenses, set apart from the account you spend from. Its only job is to make a bad quarter survivable. It should be easy to reach and hard to casually spend.

Bucket three is everything beyond that. If you're a bootstrapped company with no CFO, this bucket is often empty. (Yes, really. That's normal.)

The yield trap

This is where smart people get creative.

Rates are well above where they were in 2021, and every fintech has a "put your idle cash to work" button. So the temptation is to chase a better rate on money that was never idle. Operating cash isn't idle. It's inventory for next month's obligations.

Gaining a fraction of a percent on money you might need on Thursday is a trade that looks clever right up until the Thursday you need it.

Operating cash isn't an investment. It's the thing that lets you keep making investments.

At this size, the only yield worth optimizing is the kind you never see: the payroll you didn't miss, the vendor you didn't stall, the decision you made calmly instead of in a panic.

The quiet limit

One more thing, and it's not exciting. Deposit insurance from the FDIC covers $250,000 per depositor, per insured bank, per ownership category. If your reserve grows past that at a single bank, or your money sits with a fintech whose banking partner you couldn't name, that's worth a conversation with your accountant or banker. I'm not either of those. I've just watched enough founders discover their setup in the middle of a bad week.

Where the number comes from

Doing this well by hand is a slog. Reconciling several accounts, deciding what's operating versus reserve, and keeping the whole picture current is work that quietly eats the hours you meant to spend on the business. MyRunwayHealth won't tell you where to park your cash, and it won't hold it for you. What it does is connect to QuickBooks Online or Puzzle, sync on demand, and show your runway in months, which is the number that tells you whether the buckets are the right size.

Final thoughts

It's not about yield. It's not about being clever. It's not about turning into someone who reads bond sheets for fun.

If you can say how much is for this month, how much is for the bad quarter, and where each of them physically sits, you're already ahead of most people running a business.

And if the answer is still "some of it's in a savings thing"? Fix that first. You'll sleep better.