Cash Management Matters — White Paper

February 1, 2023

Ever since the Federal Reserve first raised the federal funds rate in March 2022, “cash management matters again” for individuals. Let’s start with a definition. lnvestopedia defines cash management as “the process of collecting and managing cash flows.” At D.L. Carlson, the relationship management team wants to ensure that in this new environment, idle cash (that is not invested with us) is earning a competitive, high rate of interest for clients.

First, each person in charge of running a family’s daily cash flows should determine a certain amount of cash “safety net” that should be set aside in a safe, liquid cash-like investment. Often times one will hear this referred to as an “emergency fund.” This process varies for each client but should result in a concrete goal.

Second, where do you park your safety net? My opinion is that a typical bank savings account is a poor option in the current environment. Banks are not being competitive with interest rates paid on savings accounts because they simply don’t need your money. Bank reserves are ample therefore they have no incentive to pay a high-interest rate.


So, here are three options each investor should consider:


Money Market Account

This is an interest-bearing account at a bank or credit union ( We have seen much higher rates of interest offered from these accounts. At the time of this writing, shows most firms offer greater than 3.25% interest rate. The main advantage of these accounts is the higher interest rate, but there are some “Cons” to these accounts such as limited transactions, fees and/or minimum balance requirements. We at DLC believe you should do your homework and you should find a money market account that fits your needs.

US Treasury Bonds/Bills.

United States Treasury securities, also called Treasuries or Treasurys, are government debt instruments issued by the United States Department of the Treasury to finance government spending as an alternative to taxation. Lending money to the US government is considered a very safe investment. Currently, all Treasuries maturing in less than two years are earning 4% or more.

Certificates of Deposit (CD)

This is a savings account that holds a fixed amount of money for a fixed period of time, such as six months, one year, or five years, and in exchange, the issuing bank pays interest. When you cash in or redeem your CD, you receive the money you originally invested plus any interest. There are often penalties for redeeming a CD early, so be careful when choosing your maturity and read the detail of the offering. There is also likely to be minimums. CD rates, at the time of this writing, have started to be more competitive

Cash management matters! Don't let idle cash not work for you in what is a dramatically higher interest rate environment than 12 months ago. Please reach out to DL Carlson for any further questions.

Let's Talk

Finding a better way doesn’t start with you learning about investment strategy. It starts with us learning about you.

Let’s get started.

Contact Us