In 2026, practices should earn 1.5–2% on operating cash and 4%+ on reserves. Here's how to benchmark your bank — and what to do if you're earning far less.
The Federal Reserve implemented two rate cuts in late 2025, positioning the Fed Funds rate near 3.75% as of early 2026, with Treasury yields hovering around 4%. Most medical practices should expect their banks to reflect these rates — but many don't.
Expected APY ranges by account type:
| Account Type | Expected APY |
|---|---|
| Checking at generalist big bank | 0.01–0.05% |
| Healthcare-native business operating account | 1.5–2% |
| High-yield business savings | 3–4% |
| T-bills (4-week) | 4.0–4.4% |
| Brokered CDs (3–12 month) | 4.2–4.8% |
| IntraFi Cash Service (sweep with yield) | 1.75–3.5% |
These ranges shift with Fed decisions, though relative gaps between account types remain consistent. A few fintech banks advertise a single flat rate well above this table, the kind of pitch weighed directly in our comparison of Bluevine's yield-first pitch against Lemma (opens in a new tab).
A typical five-location practice holding $2M in pooled cash should anticipate $70K–$90K in annual yield — representing a 3.5–4.5% blended return. Practices earning under $20K on the same balance likely bank with a generalist institution, representing substantial lost opportunity.
Generalist banks raise deposit rates slowly. They benefit when the Fed raises rates while continuing to pay you the same 0.05%. They cut rates fast when the Fed cuts.
Healthcare-native and challenger banks distribute more rate benefits to customers. Without the expense burden of branch networks and ATM infrastructure, they operate differently. The spread between optimal and average yields widened during 2024–2025, with differences of 200–400 basis points now typical.
Follow this evaluation process:
If your effective yield trails the Fed Funds rate by over 200 basis points, reconsider your banking relationship. A gap exceeding 300 basis points suggests switching makes financial sense.
Recommended steps in sequence:
Lemma's operating account delivers 1.75% APY without minimum balances, plus FDIC coverage via an IntraFi sweep (opens in a new tab).
Three factors influence APY this year:
If the Fed cuts an additional 50 basis points, expect operating account yields to approach 1.25–1.5%, with Treasury instruments following suit.
Banks advertise 5–6% APY rates with conditions worth examining:
For larger practices, these promotions function primarily as marketing, not viable strategy.
The 2026 banking landscape presents unusual opportunities, with substantial gaps between what banks should pay and what they do pay. Medical practices should calculate their current yield, obtain competitive quotes, and reassess their banking arrangements accordingly.