> [llms.txt](https://getlemma.com/llms.txt)

# What is a sweep network and why it matters

Sweep networks turn $250K of FDIC coverage into $10M. Here's the 30-second version, the trade-offs, and the one question to ask your bank today.

You have $2M sitting in your operating account. Your bank insures the first $250,000. The other $1.75M is on the line if the bank fails.

A sweep network fixes this. In one product. Without you noticing.

## The 30-second version

Your bank partners with a network of other FDIC-insured banks. Your deposits get split into $250,000 slices. Each slice sits at a different bank. Each is fully insured.

You see one balance. The network spreads the cash. Result: [FDIC coverage extended to $10M per entity](/provider-guides/fdic-insurance-medical-practice), sometimes more.

## Where the cash actually goes

Most sweep networks (IntraFi Cash Service, ICS, CDARS) work the same way:

1. You deposit money at your primary bank
2. Your bank places the funds into the network
3. The network distributes deposits across other FDIC-member banks in $250K chunks
4. Statements still come from your primary bank

You write one check. The network handles the rest.

## Why this exists in the first place

FDIC coverage was set in 1933 at $2,500. It's been raised eleven times since. The current $250,000 limit was set in 2008.

The problem: a typical operating account for a 5-location dental group runs $1M to $3M. The limit hasn't kept up with how businesses actually hold cash.

Sweep networks are the regulatory-blessed workaround. The first one (Promontory's CDARS) launched in 2003. The product has matured into something most banks could offer if they wanted to, yet [FDIC insurance and sweep coverage still get conflated](/provider-guides/fdic-vs-sweep-network-coverage) more often than not.

## What you give up

Real talk. Sweep networks aren't free magic. Trade-offs:

- A small yield haircut (sometimes 5-15 basis points vs. a single high-yield account)
- A list of "destination banks" you can opt out of for relationship reasons
- Slightly slower availability on day-1 deposits (most clear in one business day)

For a practice holding $1M+ in operating cash, the trade is usually worth it.

## What you keep

You don't lose visibility, control, or convenience:

- One login at your primary bank
- One statement showing the full balance
- Same wire and ACH limits
- Same fee structure
- Per-entity reports if you're running [an MSO-PC structure](/mso-banking)

The destination banks are invisible to your day-to-day.

## What practices actually use this for

A few common cases:

- Operating cash above $250K at a single bank
- Capital reserves earmarked for build-outs or M&A
- Sale proceeds parked between deal close and reinvestment
- Multi-entity DSOs and MSOs with millions in pooled treasury
- Single-PC practices with healthy AR cycles and over $250K in float

If your CFO can't tell you total insured coverage in under 30 seconds, you need this.

## Picking a bank that offers it

Most generalist banks don't offer sweep networks. The ones that do bury it under "treasury services" and require minimum balances or extra paperwork.

Healthcare-native banks like Lemma include it as standard. $10M FDIC per entity, no minimums, set up in one click.

## The one question to ask today

Email your relationship manager. Ask: "What's my total FDIC-insured coverage right now, broken out by entity?" If the answer takes more than a day or comes back as a guess, you have your answer.

A sweep network turns $250K coverage into $10M with no real downside. If your bank doesn't offer one, you're paying for risk you don't need to carry.

## Your bank doesn't know healthcare. Lemma does.

Lemma is business banking for healthcare practices, MSOs, DSOs, and multi-entity groups: free ACH, up to 1.75% APY, $10M FDIC protection, entity management, cash sweeps, and an AI-powered lockbox that digitizes checks and EOBs on arrival.

Free for a single entity, $50/month per entity for groups. Open in 5 minutes. It's the last bank switch you'll make.

[Sign up](https://app.getlemma.com/sign-up)
[Book a demo](https://calendly.com/d/ct72-djp-r7w)
[Pricing](https://getlemma.com/pricing)