Mercury vs a traditional bank: the yield gap on $500k

Most founders holding half a million dollars in a Chase or Wells Fargo business checking account are earning about $350 a year on it. That is not a typo. The FDIC's national average for interest checking sat at 0.07% in June 2026, and the flagship business checking products at the biggest banks pay effectively nothing. Meanwhile the same idle cash, moved into a Treasury money market product, is throwing off around $15,800 a year at current rates. The decision to leave cash where it sits has a price, and for a lot of brands that price is the cost of a junior hire they keep saying they cannot afford.

This post runs the exact dollar comparison for a $500,000 operating balance, shows how the gap has moved since the Fed started hiking in 2022, and names the real switching costs. The specific product on the neobank side is Mercury Treasury, but the logic applies to any Treasury or money market sweep. Idle cash in a zero-yield account is a decision you are making by default, and it is worth making on purpose.

The real APY at Chase, Wells Fargo, and Bank of America

Start with what the big banks actually pay, because it is worse than most operators assume. None of the three largest US banks publish an APY for their flagship business checking accounts online. Third-party reviews list Chase Business Complete Banking's interest rate as none. Wells Fargo and Bank of America are the same story on their standard products. The FDIC's national deposit rate survey, which is the cleanest public benchmark we have, put interest checking at 0.07% and money market accounts at 0.61% as of June 15, 2026.

Here is the part that should bother you. The Federal Reserve ran one of the sharpest tightening cycles in modern history between 2022 and 2024, taking the federal funds rate from near zero to 5.33%. Big banks did not pass that through to depositors. The FDIC national money market average peaked at 0.67% in early 2024, at the exact moment the Fed was holding at 5.33%. That spread between what a bank earns on your deposits and what it pays you is the quiet carry that funds a lot of bank profitability. It is not a scandal. It is the business model. But it is your money funding it.

When I talk to founders running brands in the $3M to $20M range, the reaction is almost always the same once they see the number. They knew the rate was low. They did not know it was functionally zero, and they did not know how big the annual dollar figure had become while they were busy running the business. The rate is abstract. The $15,000 is not.

What Mercury Treasury actually pays, and the math on $500k

Mercury standard business checking also pays 0%. This trips people up, so it is worth being blunt: the neobank checking account itself is not where the yield lives. The yield comes from Mercury Treasury, a separate investment product that sweeps idle cash into money market funds managed by firms like J.P. Morgan Asset Management and Morgan Stanley.

As of mid-2026, Mercury Treasury's disclosed net yield for the $250,000 to $2M balance tier is 3.01% to 3.16%, after the advisory fee. Mercury publishes those rates net of its fee, so you do not need to reverse-engineer the deduction. Run that against a $500,000 balance and you get roughly $15,050 to $15,800 a year. The same $500,000 in a bank checking account at 0.07% earns about $350. The chart below shows what that dollar gap looks like now versus at the 2024 rate peak.

Two things are worth flagging in that picture. First, the gap is real and large today: about $15,450 a year on half a million dollars of cash you were going to hold anyway. Second, it was materially bigger in 2024. At the Fed's peak, a comparable Treasury product net of fee would have paid north of $24,000 on the same balance. The pickup shrinks as the Fed cuts, which is the single most important caveat in this whole comparison: you are chasing a spread that is narrowing, not widening.

There is one operational catch. Mercury Treasury has a $250,000 minimum aggregated across all your Mercury accounts. Below that, you cannot access it, and standard Mercury checking pays 0%, so a brand sitting on $150,000 of cash gets no yield benefit from moving to Mercury at all. The product is built for the balance range where the dollar figures actually matter.

The yield gap in context: how it moved since 2022

The reason this gap exists at all is a story about transmission. When the Fed raises rates, market instruments like Treasury bills reprice almost immediately. Bank deposit rates do not. The chart below tracks a Treasury money market yield against the FDIC national deposit average from 2022 through 2026, and the divergence is stark.

The Treasury line climbs from near zero to above 5% and rides there through 2023 and 2024. The bank average barely lifts off the floor, peaking below 0.7%. That is the entire argument for moving idle cash into a Treasury product in one picture: the market repriced, and your bank chose not to pass it along.

Since early 2026 the Fed has held the funds rate around 3.63%, down from the peak, and the 3-month Treasury bill has followed to roughly 3.81%. Mercury Treasury tracks those short-duration instruments, so its yield has come down in lockstep. The gap versus big-bank checking has narrowed from its 2024 extreme but still sits at roughly 3 percentage points. On real balances, that is thousands of dollars a year.

The founder-cash question comes up in our review calls more often than you would think. One founder put the tension plainly: nobody wants to hang onto 500 grand of cash that just sits there doing nothing, and yet every brand they knew that had 500 grand sitting there going into 2022 and 2023 was grateful for it. The resolution is not to choose between a cash buffer and yield. It is to earn on the buffer while you hold it. The buffer and the yield are only in tension if the account pays zero.

What you are giving up: the real switching costs

The yield math is the easy part. The switching cost is where founders actually get stuck, and most of it is not financial. Here is the honest ledger.

Mercury is not a bank. It is a financial technology company that provides banking services through partner banks such as Choice Financial Group, Column N.A., and Evolve Bank & Trust. Your FDIC coverage, up to roughly $5M, comes from a sweep across those partner banks, not from Mercury itself. That structure is common and legal, but it is a different risk profile than a single chartered bank, and it is worth understanding rather than glossing over. One of Mercury's historical partner banks experienced a data-security incident in 2024, which is a reminder that the partner-bank layer is a real dependency, not a formality.

Mercury Treasury uses SIPC protection, not FDIC. SIPC covers up to $500,000 total against the failure of the broker-dealer holding the assets. It does not cover market losses, and the fund itself carries the normal risks of a money market instrument. For most founders that risk is small, but it is not zero, and it is a different guarantee than an FDIC-insured deposit.

Then there is the relationship. No physical branches means no in-person cash deposits, which matters if any part of your business handles cash. Harder access to credit is the one that stops the most deals: a big-bank lending relationship, an SBA 7(a) line, or a term facility is genuinely more work to replicate when your operating account lives at a neobank. The table below lays out the day-to-day product comparison so you can see the tradeoffs side by side.

Feature	Mercury (free plan)	Chase Business Complete	Chase Performance	Wells Fargo Navigate
Monthly fee	$0	$0-$15 (waived at $2k min)	$0-$40 (waived at $35k min)	$0-$25 (waived at $10k min)
Interest on checking	0%	~0%	~0%	~0% (interest-bearing option)
Yield option	Treasury 3.01-3.16% ($250k+ min)	Not disclosed	Not disclosed	Not disclosed
Free domestic wires	Unlimited	0	2 per month	Not disclosed
FDIC coverage	Up to $5M (via partner banks)	Up to $250k	Up to $250k	Up to $250k
Minimum to open	$0	$25	$25	$25
Treasury / investment product	Yes ($250k+ min)	Separate products	Separate products	Separate products

There is one cost that founders overweight: the accounting integration. Mercury connects to QuickBooks Online and Xero, and those integrations work. The switching cost there is not the connection, it is re-linking bank feeds and re-categorizing a few weeks of transactions, which is usually a few hours of bookkeeper time. When I talk to founders who have made the move, the integration is rarely the thing that went wrong. The thing that went wrong, when it did, was assuming the lending relationship would travel with the operating account. It does not, and it does not have to.

The "who should switch" framework

Put the yield and the switching costs together and the decision resolves into a fairly clean matrix. It hinges on three variables: how much idle cash you actually hold, how much you depend on a lending relationship, and whether you handle physical cash.

Mercury (or any Treasury sweep) wins when you hold $250,000 or more of genuinely idle cash beyond your operating float, you run digital-first operations, you have no near-term SBA or credit-line need at your current bank, and your accounting is already on QuickBooks or Xero. In that profile the yield pickup is real money and the switching cost is a few hours of setup.

Relationship banking earns its keep when you are an active SBA borrower or carry a term facility you would not want to disturb, you need to deposit physical cash, or your balance is below the $250,000 Treasury minimum, in which case Mercury offers you no yield advantage anyway. For those operators, the yield penalty is the price of access, and it can be worth paying.

The chart below makes the scale argument concrete: the dollar gap grows straight-line with the balance, so the bigger your idle cash pile, the more the decision is worth getting right.

For most brands the answer is not a full switch at all. It is a hybrid. Keep a thin operating account and your lending relationship at the big bank, and sweep excess cash above your operating float into a Treasury product. The table below shows the annual difference at each balance level so you can size the sweep against your own buffer.

Balance	Mercury Treasury (net)	Mercury annual	Bank average (0.07%)	Bank annual	Annual difference
$250k	3.01%	$7,525	0.07%	$175	$7,350
$500k	3.16%	$15,800	0.07%	$350	$15,450
$1M	3.16%	$31,600	0.07%	$700	$30,900
$2M	3.16%	$63,200	0.07%	$1,400	$61,800

The standard cash-reserve recommendation we give founders is three to six months of operating expenses held liquid, which is the same buffer we point to when brands are trying to free up trapped working capital rather than raise it. For a brand doing $5M or more in revenue, that reserve often lands in the $400,000 to $800,000 range, comfortably above the $250,000 Treasury minimum. That is not a coincidence. The exact balance that makes a healthy cash buffer is the exact balance where the yield decision stops being trivia and starts being a line item.

The yield gap between a neobank Treasury product and big-bank checking is not a rounding error. On a $500,000 balance it is roughly $15,000 a year, and the only reason most founders leave it on the table is that a zero-yield account never sends you a bill. The buffer and the yield were never really in tension. Earn on the cash while you hold it, keep the lending relationship where it belongs, and make the default a decision.

Related reading. For what borrowing actually costs at your revenue band, see effective borrowing cost by revenue band. For how we manage the cash stack with brands, see our fractional CFO work.

Sources and methodology

Big-bank deposit rates come from the FDIC National Deposit Rate Survey. The FDIC publishes weekly national average deposit rates. The week of June 15, 2026 showed interest checking at 0.07% and money market accounts at 0.61%, which we use as the benchmark for what a typical business checking account pays, since the largest banks do not disclose an APY for their flagship products online. See the FDIC national rates page.

Rate history is drawn from Federal Reserve series via FRED. The federal funds effective rate (FEDFUNDS) ran from near zero in January 2022 to 5.33% at the mid-2024 peak and settled to roughly 3.63% by mid-2026. The 3-month Treasury bill (DGS3MO) and money market yield (MMTY) series moved in near-lockstep, which is why a Treasury sweep yield tracks the policy rate so closely. See FRED FEDFUNDS and FRED MMTY.

Mercury Treasury rates and structure come from Mercury's own product disclosures. As of 2026-07-03, the disclosed net yield for the $250k-$2M tier was 3.01% to 3.16%, with a $250,000 minimum, SIPC protection on Treasury assets, and FDIC coverage up to roughly $5M on checking and savings via partner banks. See mercury.com/treasury and mercury.com/pricing.

Chase and Wells Fargo figures come from their public product pages, cross-checked against independent reviews. Neither bank publishes a business checking APY online; the fee and wire details reflect their published product pages, and the "interest rate: none" characterization matches independent coverage. See the NerdWallet Mercury review for the third-party benchmark on APY.

Operator context reflects anonymized patterns from founder advisory calls. Cash-reserve norms and the "buffer versus yield" tension are drawn from recurring themes in our financial review work with ecommerce brands, with all client identifying details removed. Specific bank APYs, rates, and dollar figures come only from the primary sources named above, not from those conversations.

Frequently asked questions

what apy does mercury bank pay on business checking?

Zero. Mercury standard business checking is not interest-bearing. The yield comes from Mercury Treasury, a separate investment product that currently pays about 3.01% to 3.16% net at the $250k to $2M balance tier and requires a $250,000 minimum across all your Mercury accounts.

how much can i earn on $500k in a mercury account?

At current net rates of roughly 3.01% to 3.16%, a $500,000 balance in Mercury Treasury earns about $15,050 to $15,800 a year. The same balance in a typical big-bank business checking account earns close to $350 a year at the 0.07% FDIC national average, so the pickup is around $15,450.

is mercury treasury fdic insured?

No. Mercury Treasury is a brokerage product held at a clearing firm and protected by SIPC, which covers up to $500,000 against broker-dealer failure, not against market losses. Mercury's separate checking and savings accounts carry FDIC coverage up to about $5M through a sweep network of partner banks.

what interest rate does chase give on business checking?

Chase does not publish an APY for its flagship business checking products online, and third-party reviews list it as none. For planning purposes, treat Chase, Wells Fargo, and Bank of America standard business checking as paying effectively 0%, in line with the 0.07% FDIC national average.

should i switch from chase to mercury for my ecommerce business?

It depends on your balance and your credit needs. If you hold $250k or more of genuinely idle cash, run digital-first operations, and have no near-term SBA or credit-line need at that bank, the yield case is strong. If you rely on a lending relationship or physical cash deposits, a hybrid setup usually beats a full switch.

what happens to my mercury treasury money if mercury goes bankrupt?

Treasury assets are held at a separate FINRA-regulated clearing firm, not on Mercury's balance sheet, and are protected by SIPC up to $500,000. Your checking and savings deposits sit at partner banks with FDIC coverage. In both cases your money is legally separated from Mercury itself, though a failure would still mean disruption and delay.

what's the minimum balance for mercury treasury?

$250,000 aggregated across all your Mercury accounts. Below that threshold you cannot access Treasury, and standard Mercury checking pays 0%, so there is no yield until you cross the minimum.

how is this different from a high-yield savings account?

A high-yield savings account is a bank deposit with FDIC coverage and a rate the bank sets and can cut anytime. Mercury Treasury is a money market investment whose yield tracks short-term Treasury and money market instruments, carries an advisory fee, and is protected by SIPC rather than FDIC. Different risk wrapper, usually a higher yield.