How To Manage Your Business’s Excess Cash & Liquidity

Managing excess cash and liquidity in your business is critical to optimizing returns.

Managing excess cash and liquidity in your business can be a full-time job, especially if you are working to get the most competitive return on your cash. A poll of 3,000 companies at the end of 2018 reported that these organizations had approximately $2.7 trillion in cash on hand. That is an astronomical number, especially when considering the study was limited to a sample of just 3000 of the approximately 5.6 million firms in the U.S.

Excess cash is a great problem to have, however, earning a competitive return on that cash requires a significant investment in time and energy. Many corporate finance departments spend countless hours making and tracking investments that keep their extra cash working until the company needs it. But recently, new technologies have opened the door to easier ways of managing this excess cash.

What are some effective ways to manage excess cash and liquidity?

There are numerous money market accounts, CD’s, and other investment vehicles available to businesses, but the risk profile and liquidity for each of those is different. For those organizations who need liquidity and protection for their cash, the options are limited.

In the past, those companies looking to protect liquid cash in excess of the FDIC limit would need to develop relationships with many different banks. They would then spread their funds around the multiple banks to obtain additional FDIC coverage.

This meant significant effort would be needed to manage these relationships, negotiate rates and monitor the accounts. Historically, this type of cash management has been a necessary evil for those looking to protect their cash. Fortunately for business owners, the advent of fintech has brought a new cash management option to the market.

Fintech provides a solution with safety, liquidity and a competitive return.

With the advent of fintech, the world of cash management changed dramatically. Companies are no longer required to maintain relationships with multiple banks to achieve safety and an optimized rate of return.

The American Deposit Management Co. (ADM), for example, has developed a proprietary network of banks and credit unions that compete for business deposits. This creates somewhat of a “buyer’s market” for companies looking for competitive returns in addition to protection and liquidity.

ADM can take a single deposit, in excess of $80 million, and spread it around to their network of financial institutions to achieve nationally competitive rates. This also includes access to FDIC / NCUA coverage for the entire balance. Their clients have an online portal and single consolidated statement to track their company’s funds, and those funds are available whenever they are needed.

Earn more, Risk Less®.

This new technology has disrupted traditional cash management. Companies can now focus on just a few banking relationships without sacrificing rate of return or safety.

For those companies who need their funds protected, above all else, this technology has been game changing. In the past, getting FDIC / NCUA coverage for any sum over the federal limit of $250,000 per institution meant tediously managing and reconciling accounts at multiple banks. Those days are officially over. ADM can ensure that large sums, up to $80 million, are protected with FDIC / NCUA coverage with a single deposit. They also make it easy for their clients with a single point of contact and a consolidated account statement.

How does your company get started with ADM?

Simply visit our website to speak with a member of our staff. Choose live chat or any of the standard methods to contact us. The application is simple and you can begin transferring funds via our online portal into your Marketplace Banking™ account as soon as your organization is approved. Contact a member of our team to get started today.


*American Deposit Management Co. is not an FDIC/NCUA-insured institution. FDIC/NCUA deposit coverage only protects against the failure of an FDIC/NCUA-insured depository institution.

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