$1M sitting at 0.05% earns $500 a year. The same $1M at 4.5% earns $45,000. You're paying for that gap whether you notice or not.

Here's how to optimize yield on practice operating cash without blocking liquidity.

The Opportunity Cost Is Real

Most practices think yield is something you chase if you have time. The math says otherwise:

• $1M at 0.05%: $500/year

• $1M at 1.75%: $17,500/year

• $1M at 4.5%: $45,000/year

The difference between a sleepy operating account and a tuned one is 3-4x the cost of a part-time controller.

Three Buckets to Think In

You don't need a treasury committee. You need three buckets:

• Operating: covers 30-60 days of expenses. Needs full liquidity.

• Reserve: covers months 2-6. Can take 1-2 day settlement.

• Strategic: capital reserve, M&A money. Can lock for 30-90 days if it pays.

The mistake most practices make is parking everything in bucket 1.

Bucket 1: Operating Cash

Goal: full liquidity, no surprises, FDIC-insured.

Target yield: 1.5-2% APY.

Where it lives:

• High-yield business checking or savings at a healthcare-native bank

• Lemma's operating account: 1.75% APY, no minimums, full ACH and wire functionality

• Avoid generalist big-bank checking. Many still pay 0.01%.

Bucket 2: Reserve Cash

Goal: short-duration safety, slightly higher yield, liquidity inside a week.

Target yield: 4-4.75%.

Where it lives:

• Treasury bills (4-week or 13-week)

• Money market funds (Treasury-backed)

• Short-term CDs from a sweep-laddered bank

Trade-off: T-bills aren't FDIC-insured. They're backed by the US Treasury, which is fine for most practices, but it's a different protection.

Bucket 3: Strategic Reserves

Goal: extract more yield from money you don't need this quarter.

Target yield: 4.5-5.5%.

Where it lives:

• Brokered CDs (3-12 month)

• T-bills (26-week or 52-week)

• IntraFi CDARS for FDIC-insured laddered CDs

Liquidity: 30-90 days. Worth it for capital reserves, deal proceeds, or reserves for known build-outs.

When to Rebalance

Don't pick a split and forget it. The buckets shift with the practice. A few triggers that should make you rebalance:

• A new clinic opens (operating bucket grows)

• A capital call clears (strategic bucket spikes, then drains)

• A payer contract changes terms (revenue lumpiness shifts)

• Rates move 50 bps or more

• Annual planning, no matter what

Quarterly reviews catch most of this. A treasurer with the right dashboard can do it in 30 minutes.

A Simple Split for $1M+

A clean default for a $1M operating balance:

• 30% Operating: $300K at 1.75% = $5,250/yr

• 50% Reserve: $500K at 4.5% = $22,500/yr

• 20% Strategic: $200K at 5.0% = $10,000/yr

Total: $37,750/yr vs. $500/yr at idle. Same liquidity profile if you do it right.

What to Avoid

Three popular bad ideas:

• "Just put it all in T-bills." Loses operating liquidity. Surprise expenses become a problem.

• "Move it to crypto or stablecoins for the yield." Different risk class. Not FDIC-insured.

• "Wait until rates settle." Rates have been above 4% for two years. The wait is the cost.

$45K in idle yield isn't a luxury. It's two new staff or a year of better software. Set up the buckets once, review quarterly. That's the whole job.