Tech companies in 2025 face a financial landscape shaped by fintech innovation and recent bank failures. The Silicon Valley Bank collapse in 2023 underscored why founders must diversify and protect large cash deposits. Meanwhile, rising interest rates mean idle cash can yield significant returns, driving startups to seek safe yet productive places to park funds. This is where bank sweep products come in.
These tools automatically spread a company’s deposits across multiple banks to maximize FDIC insurance coverage—often while earning interest on surplus cash. For startup teams and fractional CFOs alike, sweep accounts have quickly become essential for prudent cash management and risk mitigation.
In this post, we’ll explain how bank sweep products work and why they matter for startups and tech companies, evaluate the latest offerings from Mercury, Brex, and Rho (including features, benefits, and drawbacks), highlight emerging competitors, offerings by established players like JP Morgan Chase and HSBC, and analyze the impact of tariffs and global trade on cash management, and offer recommendations for optimizing cash flow and risk management in 2025.
What Are Bank Sweep Products and Why Do Startups Need Them?
A bank sweep product (often called an insured cash sweep or ICS account) is a service that automatically spreads a business’s deposits across multiple FDIC-insured banks. By doing so, a company can extend its total coverage beyond the standard $250,000-per-bank limit. For example, instead of keeping $1 million in one bank (with only $250K insured), a sweep network might allocate those funds into four different banks so the entire $1M is protected. Many sweep programs today offer coverage in the millions; it’s common to see $3–5 million insured, and some networks with hundreds of partner banks can cover even higher amounts.
This mechanism is highly relevant for startups, which often hold large cash balances after fundraising. Rather than managing dozens of bank accounts themselves, founders can keep their money with one platform and let the sweep system handle the rest. The result is greater protection and “peace of mind” for businesses knowing their funds are safe. In the wake of recent bank failures, having no single point of failure for deposits has become a best practice. And as a bonus, many sweep accounts also integrate interest-earning options, so startups can both secure their cash and earn a return on it at the same time.
Mercury, Brex, and Rho: Latest Sweep Offerings
Mercury
Mercury is a popular startup banking platform that offers Mercury Vault, an insured sweep program providing up to $5 million in FDIC coverage. It achieves this by spreading deposits across its partner banks and its own network. Mercury also offers Mercury Treasury, which lets startups invest excess cash into a Vanguard money market fund for yield (separate from the FDIC-insured balances). The Mercury account has no fees.
Benefit: Very startup-friendly and secure—Mercury launched Vault right after the SVB incident to protect clients’ funds.
Drawback: The $5M insurance cap may not cover larger war chests, and earning interest requires moving money into the Treasury account (the regular account itself doesn’t pay interest).
Brex
Brex’s business account similarly uses a sweep network (20+ program banks) to insure up to $6 million of deposits. All funds remain accessible for daily use, and Brex touts that you can earn around 4% APY on idle cash by automatically sweeping it into a money market fund. Brex integrates banking with its corporate credit card and spend management tools, offering an all-in-one finance solution.
Benefit: A high insurance limit (~$6M) and seamless liquidity—access to 100% of funds anytime while still earning interest.
Drawback: Brex historically focused on VC-backed companies, so very early startups or small businesses might not fit its criteria. Its coverage, while generous, is outpaced by Rho for those needing more.
Rho
Rho differentiates itself with an exceptionally large sweep capacity. Through its Treasury Management Account, Rho can spread deposits across 400+ banks to insure up to $75 million—far above Mercury or Brex. This makes Rho suitable for later-stage startups with huge cash reserves. However, Rho’s sweep (often called the “Rho Treasury” business savings) does not pay interest on those balances. To earn yield, clients need to use Rho’s separate investment account (which requires a higher minimum, e.g., $500K) to invest in T-bills or other low-risk securities.
Benefit: Unmatched FDIC coverage—essentially no uninsured risk even for very large accounts.
Drawback: Smaller startups won’t fully utilize that high cap, and they might prefer a platform that pays interest on smaller balances by default. Rho’s emphasis is on comprehensive treasury management, which can be more complex than a plug-and-play bank account for early-stage companies.
Emerging Competitors and Alternatives
Beyond the big three, other fintechs and banks offer similar sweep services for startups. One notable example is Arc—a startup-focused platform that not only provides FDIC coverage up to about $5.25 million through partner banks but also pays interest on those deposits. Arc’s model gives startups both security and yield (it advertised over 2% APY, later raising to around 4%), effectively letting founders protect all their funds and earn a return at the same time. Another competitor, Bluevine, offers a business checking account with an insured sweep up to $3 million. Bluevine stands out by paying 1.5% interest on balances up to $250K (above that, funds are swept into its network for safety). This caters well to smaller startups that want some interest but don’t have many millions in the bank.
JPMorgan’s Beyond Banking Program
JPMorgan’s startup banking initiative dubbed the “Beyond Banking” program, extends far beyond a basic checking account. For example, JPMorgan offers corporate cards with dynamic underwriting and no personal guarantees required from founders, ensuring startups can access credit without putting personal assets on the line. The bank’s acquisition of Global Shares means clients get an integrated cap table management platform (similar to Carta) with fees waived for up to 100 stakeholders, helping young companies manage equity structure at no extra cost.
Beyond traditional banking, JPMorgan leverages its scale to secure partner discounts on business services—from accounting software to cybersecurity tools—giving startups affordable access to resources as they grow. As companies scale, JPMorgan can step in with venture debt financing for post-Series B startups, providing additional runway after a venture round (contingent on sufficient liquidity). Startup clients also receive “white glove” service—a dedicated relationship manager and support team—instead of generic 1-800 numbers. These comprehensive offerings and high-touch support differentiate JPMorgan from many fintech alternatives, positioning the bank as a strategic financial partner that can grow with the startup.
HSBC’s Innovation Banking and Spark Package
HSBC’s Innovation Banking division similarly tailors its services to tech startups through offerings like the Spark Package. This early-stage bundle gives new startups 24 months with no banking fees, including unlimited wires and ACH transfers, with no minimum balance requirement. Every startup client—even at pre-seed—is paired with a dedicated relationship manager who understands the startup journey, providing personalized guidance that pure online banks often can’t match.
As startups grow, HSBC scales alongside them: Spark graduates (Series A and beyond) gain access to HSBC’s venture debt financing and its full global banking platform. Through Innovation Banking, founders can tap HSBC’s international network—spanning the US, UK, Israel, and Asia—for multi-currency accounts, investor connections, and market expansion support. HSBC’s ability to combine the stability and scale of a large global bank with the agility and client-focused approach of a specialist tech lender truly sets it apart. These features make HSBC a powerful ally for startups, offering not just financial services but a long-term partnership to fuel growth across borders.
The Impact of Tariffs and Global Trade on Startup Cash Management
Tariffs—essentially taxes on imports—can make the supplies or components startups rely on more expensive. This increase in cost can “place an outsized burden on cash flow” by raising expenses and even causing payment delays. When a trade war or new tariff hits, startups might have to pay more upfront for inventory or manufacturing, tying up cash that could have been used elsewhere.
Founders and CFOs should adjust their strategies in light of global trade shifts. It’s wise to build a cushion into the financial plan and run what-if scenarios (e.g., “What if our cost of goods rises 10% due to tariffs?”). Finance teams are advised to negotiate favorable payment terms with suppliers to offset tariff impacts—for example, paying a vendor in 60 days instead of 30 can help cash stay in the bank longer. The key is staying agile: global trade policies can change fast, so cash management plans should be ready to pivot accordingly.
Key Recommendations for Startups
- Use Sweep Accounts to Protect Every Dollar: Don’t leave large deposits exposed. Leverage FDIC sweep networks (via Mercury, Brex, etc.) to insure funds above $250K. This might mean spreading cash across multiple providers to stay within limits.
- Make Idle Cash Work (But Keep It Liquid): Optimize your treasury by earning interest on surplus cash. After raising capital, move funds you don’t need for immediate operations into high-yield sweep accounts or money market funds. Even a 3–4% APY can meaningfully extend your runway.
- Stay Agile and Plan for Change: Integrate cash management into your strategic planning. Run regular cash flow forecasts and “stress test” them for scenarios like supplier costs doubling or a big customer paying late. Negotiate flexible payment terms and keep an extra buffer in insured accounts during uncertain times.
Turning Financial Strategy Into a Competitive Advantage
Financial best practices for startups in 2025 boil down to protecting your cash and putting it to work. Bank sweep products have made it dramatically easier to do both—founders can keep large sums safe (with insurance into the millions) and earn meaningful interest effortlessly. However, tools alone aren’t enough; savvy founders and CFOs also update their strategies as conditions change. The startups that thrive are those that plan ahead, diversify wisely, and stay informed. By treating cash management as a strategic priority—on par with product or growth initiatives—even early-stage companies can navigate uncertainty with confidence. In a landscape where anything from a bank failure to a trade policy shift can arise, having your financial house in order is a true competitive advantage.
Disclaimer:
The content in this blog post is provided for informational purposes only and should not be construed as financial, legal, or professional advice. We recommend that startup founders, CFOs, and other readers perform their own due diligence, review current market conditions, and consult with qualified financial professionals before making any decisions related to banking or cash management. We do not endorse, promote, or receive compensation from any of the institutions mentioned in this post. The opinions expressed here are solely those of the author and do not necessarily reflect the views of our firm.
