> ## Content Index > Fetch the complete content index at: https://www.capitalfounders.io/llms.txt > Use this file to discover other available public pages before exploring further. # Where to Keep Cash After Selling a Business - URL: https://www.capitalfounders.io/where-to-keep-cash-after-selling-business/ - Published: 2026-11-03T09:00:00.000Z - Updated: 2026-11-03T08:59:59.000Z - Description: After selling a business, many founders keep months or years of spending in cash. Bank deposits, money-market funds, gilts, and gold each protect you from a different risk and earn different after-tax, inflation-adjusted returns. Five questions help you check where your cash sits. - Author: Taras Rybak - Tags: Investment Office, Capital Signal After selling a business, many founders put the money they'll live on for the next few years somewhere safe: the bank, a money-market fund, government bonds, sometimes gold. Each carries some safety and some risk. Money in the bank doesn't fall when markets do, for example, but if the bank fails, only part of it is protected. How much to keep is [a separate question](https://www.capitalfounders.io/post-exit-capital-buckets/). What it's safe from depends on where you keep it, and so does what it costs you to leave it there. ## This Week in 30 Seconds - **What a cash reserve is for.** It's money you can get at quickly without losing any of it. What it's safe from depends on where you keep it: a bank account keeps your balance steady when markets fall, but if the bank fails, only part of it is protected. - **What it earns now.** In the UK, short-dated gilts and new fixed-term deposits pay about 4.3% to 4.8%. The average instant-access account paid 1.66% in September, less than inflation. - **When a bank fails.** Cover is £120,000 per bank in the UK and $250,000 in the US. When Silicon Valley Bank failed in 2023, its depositors got the rest back only because of decisions made over one weekend. - **Five questions, and where I stand.** For a reserve, I look first at how quickly I could get the money out. Protection against the whole economy collapsing is a different game, and the end of the USSR showed me why. - **What I'm reading.** The Budget's new Founders' Relief sounds good as a headline, but few founders will qualify. When private credit fund shares sell at a discount, I'd say it shows some buyers chose the wrong investment. And JPMorgan is blocking AI tools that log in with your password. ## What a cash reserve is for after a sale You keep a cash reserve so you can get at money quickly, without losing any of it or having to sell something else at a bad moment. Think of it as part of the whole portfolio, and beyond the return, it's also about how it makes you feel. You may give up some return by keeping more in cash than you strictly need, but if it gives you peace of mind, that's OK too. Room for error is non-negotiable: the right amount of reserve is when it feels like a little too much. You pay for that comfort, though, and over decades it adds up. In [UBS's yearbook of long-run returns](https://www.ubs.com/content/dam/assets/wm/static/cio/documents/giry2026-summary-public.pdf?ref=capitalfounders.io), US Treasury bills beat inflation by 0.5% a year between 1900 and 2025, and shares beat it by 6.6% a year. And if you want protection in case the whole economy goes badly wrong, you need something else, because most of what you hold for safety can't do that job. ## Four places to keep cash, and what each protects you from - In a bank account, your balance stays the same no matter what the markets do. But if the bank fails, you're covered only up to [£120,000 per bank](https://www.fscs.org.uk/what-we-cover/banks-building-societies-credit-unions/deposit-limit/?ref=capitalfounders.io) in the UK and $250,000 in the US. Brands that share one banking licence count as one bank. - In a money-market fund, your cash is spread across many short loans, so if one bank fails, only a limited part of your money is exposed to it. But it isn't a deposit, and nobody guarantees your money in it (UK and EU funds [have to say so](https://www.legislation.gov.uk/eur/2017/1131/article/36?ref=capitalfounders.io) in their documents). - If you hold Treasury bills or gilts yourself, you're lending to the government, so your money is safe if a bank fails. If you hold them until they're repaid, you get what was promised; if you sell early, you get the market price. You are also exposed to counterparty risk, meaning if your broker or custodian goes out of business, it can take quite a bit of time to get your money (or securities) back and you might not get the full amount. - If you hold gold bars or coins, nobody owes you anything, so nobody can default. But gold pays nothing, and its price swings: from a record $5,405 an ounce on 29 January, it fell [about 23%](https://www.gold.org/goldhub/research/gold-market-commentary-september-2026?ref=capitalfounders.io) by the end of September. When it comes to physical gold or metals, it also might be difficult to sell it at the market price in case of market stress. ![What your cash is safe from: four places to keep it after a sale, in the UK or the US. A bank account is safe from markets falling, open to a bank failure above the cover limit, and pays interest set by your bank. A money-market fund is safe from one bank failing, carries no guarantee and pays close to short-term rates, less fees. Treasuries or gilts held directly are safe from a bank failing, open to a loss if rates rise and you sell early, and pay a yield fixed when you buy. Gold bars and coins are safe from a default because nobody owes you anything, are open to price swings and storage costs, and pay nothing. For general guidance only; deposit cover is £120,000 per person, per bank in the UK and $250,000 per depositor, per bank in the US.](https://storage.ghost.io/c/71/79/7179fad3-7d04-43ac-adef-ebe0849bf7ad/content/images/2026/10/where-to-keep-cash-after-selling-business-figure.png) In the UK, you can get up to £1.4m of cover for 6 months after [some life events](https://www.fscs.org.uk/making-a-claim/claims-process/temporary-high-balances/?ref=capitalfounders.io), such as selling your main home or receiving an inheritance, but selling a company isn't one of them. With accounts at several banks, you're covered up to the limit at each one, and a company you own usually has its own cover ([more on both here](https://www.capitalfounders.io/diversify-wealth-across-countries/)). A government money-market fund puts nearly all your money into cash and government debt. A prime fund also lends to banks and companies. In two weeks of March 2020, investors pulled about 30% of their money from the big US prime funds used by companies and institutions. Those funds can now charge you an exit fee on a day like that. With a gold ETF or ETC (an exchange-traded fund or commodity), you own a stake backed by bars in a vault, but you can't usually collect them yourself. With some gold products, you own no metal at all, only a collateralised contract that pays out whatever gold does. That's fine if you're trading it. But if you're buying gold for the day everything else fails, I don't think it's the right investment. ## What your safe money earns after tax and inflation Your cash earns far more today than it did when interest rates were near zero. From March 2009 until May 2022, the [Bank of England's rate](https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp?ref=capitalfounders.io) never went above 0.75%. It's 3.75% now, and the Bank sets it again on 5 November. You can get about 4% to 4.8% with little chance of not getting your money back: - On a new fixed-term deposit in the UK, you'd have got [4.42%](https://www.bankofengland.co.uk/statistics/effective-interest-rates/2026/september-2026?ref=capitalfounders.io) on average in September. - Gilts due in 2028 and 2031 paid about 4.3% to 4.8% when the government sold them in October. - In the US, a 3-month Treasury bill paid [4.08%](https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily%5Ftreasury%5Fbill%5Frates&field%5Ftdr%5Fdate%5Fvalue%5Fmonth=202610&ref=capitalfounders.io) on 30 October. A fixed-term deposit locks your money up until the term ends, while you can sell a bill or gilt any day, at that day's price. And if you spend in pounds but hold dollars, a few per cent move in the exchange rate can cost you a year's interest. An instant-access account paid you 1.66% on average in September. On £2m, that's about £42,000 a year less than the Bank of England's rate, before tax, and your bank keeps the difference. When markets swing, I can see why many people keep more in cash and short bonds: you get a decent return with little risk. A bond's price can still move before it's repaid, though. If you sell early, you get the market price, which falls when rates rise: in 2022, UK government bonds as a whole lost 24%. The sooner a bond is due to be repaid, the less its price moves, so a 3-month bill hardly moves at all. UK prices [rose 3.5%](https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/september2026?ref=capitalfounders.io) in the year to September, so cash in an instant-access account is losing about 1.8% of its value a year, before tax. You also pay tax on the interest: up to 45% now, and up to 49% from April 2027 (more in What I'm Reading). At 45%, you keep 2.43% of the 4.42% on a new fixed-term deposit, which is less than inflation. On gilts, you pay [no capital gains tax](https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg54900?ref=capitalfounders.io), only tax on the interest. Gilts that pay almost no interest sell below face value, so most of what you make on one is a tax-free gain when it's repaid. On one yielding about 4.3%, a top-rate taxpayer still has about 4.2% after tax, against 2.43% on the fixed-term deposit. Check with your tax adviser whether that suits you. Gold pays nothing, and storing it costs money: one UK vault charges 0.65% a year plus VAT, and another charges 1%. It's easy to buy and harder to sell. The [US commodities regulator](https://www.cftc.gov/LearnAndProtect/AdvisoriesAndArticles/Metals10Things.html?ref=capitalfounders.io) warns that "A dealer will always sell metal above the spot price and buy it back below the spot price." If you need the money fast, you may have to accept a big discount. ## When a bank fails: what happened to SVB's depositors At the end of 2022, [about 94%](https://www.federalreserve.gov/publications/files/svb-review-20230428.pdf) of the money customers held at Silicon Valley Bank was above the US insurance limit. On 9 March 2023, they pulled out more than $40bn, and the bank was closed the next day. Roku, the streaming company, had [about $487m there](https://www.sec.gov/Archives/edgar/data/1428439/000142843923000010/wk-20230310.htm?ref=capitalfounders.io), around a quarter of its cash, and most of it wasn't insured. Two days later, on the Sunday evening, depositors [were told](https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm) they'd get every dollar back from Monday. Insurance would have covered only $250,000 each. SVB's UK customers had the same weekend. On Friday, the Bank of England [said it planned](https://www.bankofengland.co.uk/news/2023/march/boe-statement-silicon-valley-bank-uk?ref=capitalfounders.io) to put the UK arm into insolvency, paying each customer up to £85,000, the limit then. At 7am on Monday, it was [sold to HSBC for £1](https://www.bankofengland.co.uk/paper/2024/report-under-section-79a-of-the-banking-act-2009-on-the-transfer-of-svb-uk-to-hsbc-uk?ref=capitalfounders.io), and all their money was safe. If you'd had millions in either bank, you'd have got it back only because of decisions made over one weekend. ## How cash and gold are sold to you, and who earns from it When your broker or private bank holds your cash, you often lose part of the interest to them. In December 2023, the FCA [told investment platforms](https://www.fca.org.uk/publication/correspondence/dear-ceo-letter-retention-interest-earned-customers-cash-balances.pdf?ref=capitalfounders.io) to end "double dipping": charging clients for holding cash while also keeping some of the interest it earns. A website that finds a better rate is only a go-between: the cover comes from the banks it puts money in. And if a private bank sells a "structured deposit" where you can lose some of what you put in, [deposit cover doesn't apply](https://www.prarulebook.co.uk/guidance/supervisory-statements/ss18-15-depositor-protection?ref=capitalfounders.io) to it. You'll often hear gold sold as the safe haven: when markets get nervous, people buy it, and many now buy and sell it as a short-term bet. Against inflation, gold is patchy. UBS found it lost money in 13 of the 28 years when inflation was above 3%, though since 1900 it has beaten US inflation by about 1.3% a year. Governments have taken even bars before: in 1933, the US [ordered people to hand in](https://www.presidency.ucsb.edu/documents/executive-order-6102-forbidding-the-hoarding-gold-coin-gold-bullion-and-gold-certificates?ref=capitalfounders.io) their gold coins, bars, and certificates, and each person could keep only up to $100 in coins and certificates. ## Five questions to check where your cash sits 1. At each bank, how much of my cash is over the limit, counting banks on one licence as one (your bank can tell you)? 2. What is each balance paying, compared with the Bank of England's rate or a 3-month bill, and where does the difference go? 3. If I needed the money next week, how much of each part could I get, and at what cost? 4. Is my reserve in the same currency as my spending? 5. If I'm counting on any of it in a collapse, would it still be worth something, and could I get at it? You'll need your statements for the first two. List each account that holds cash, with the bank, currency, and rate, and mark anything over the limit. With the statements open, it takes about 20 minutes, and whatever you've marked is money a bank failure could cost you. **Where I stand.** For a reserve, I think of deposits, money-market funds or bonds, and the first thing I look at is liquidity: how quickly it could be turned into cash if needed. Hedging against something going really wrong in the economy is a whole different game, and that's what question 5 is about. For that, I'd look beyond the usual places, at real assets such as property and land. I saw why as a child. I grew up in Ukraine, which was then part of the USSR, and when it collapsed, I watched what my parents and the people around them went through. Many had large savings, mostly in the state savings bank. In January 1991, people could take out only 500 roubles a month, no matter how much they had saved. Then prices took off: in 1993 alone, they rose more than a hundredfold, and within a few years those savings could buy almost nothing. The people who did well had the means to buy something real: property, land, factories, machinery, anything real. Most people lost almost everything they had, while a few, the smart or the well-connected, made fortunes. Many oligarchs of that era made their money that way, buying real assets cheaply as everything collapsed. That's the lesson I'll always remember: in a collapse like that, money in the bank can lose almost all its value, while real assets hold theirs. If there's a money question nobody has answered straight for you, reply, and the best ones get answered in December's edition. ****Everything here is free.** Subscribing just tells me the content is useful — and helps me decide what to write next. [Subscribe ](https://www.capitalfounders.io/#/portal/) ## What I'm Reading ### The Budget offers founders a 10% tax rate that few will qualify for. The Budget on 28 October plans Founders' Relief from April 2027: you'd pay 10% tax on the first £10m of lifetime gains from selling your company. The government thinks about 600 people a year will get it. [Read the Founders' Relief paper →](https://www.gov.uk/government/publications/capital-gains-tax-introduction-of-a-founder-relief/capital-gains-tax-introduction-of-a-new-founders-relief?ref=capitalfounders.io) To qualify, you'd need to have owned at least 25% of the shares when the business started, kept them for 5 years and lived in the UK for 5 years. The company needs at least £10m in sales and 15 full-time staff, plus any two of the following: sales growing 25% a year for three years, the same growth in staff, or at least £1.5m spent on R&D. The same Budget means you'll pay more tax on interest from savings: 24%, 44% or 49% from April 2027, depending on your tax band. [Read the savings tax paper →](https://www.gov.uk/government/publications/income-tax-changes-to-tax-rates-for-property-and-savings-income/income-tax-changes-to-tax-rates-for-property-and-savings-income?ref=capitalfounders.io) To me, this relief shows that governments are out of touch with reality, or know exactly what they're doing. Either way, it sounds good as a headline, but very few founders will qualify, while many savers will pay more tax on their interest. Always read the small print. If you're an entrepreneur, don't assume the government is acting in your best interest. With the state short of money and looking to the people who earn or own something, I think it will get worse before it gets better. So plan your business and tax affairs with that in mind, well before any sale. ### Investors in two private credit funds were offered prices 12.5% and 17.5% below the funds' own valuations. If you'd bought into either of two big US private credit funds, an outside buyer is offering to take your shares at 12.5% or 17.5% below what the fund itself said they were worth in the summer, until 3 November. These evergreen funds have no end date and buy back only a limited number of shares each quarter, so a buyer like this is the other way out, at a discount. [Read the story →](https://buttondown.com/thesecondarybrief/archive/2026-10-24/?ref=capitalfounders.io) Many managers who used to raise money from institutions have turned to private investors, and I think part of the reason is that raising new money from institutions has become harder. They've designed products to look more attractive to people like us, but what's inside hasn't changed much. A fund can be doing well and still trade at a discount. The discount suggests some buyers didn't understand what they owned and chose the wrong investment for money they might need back. As Warren Buffett once wrote, "You only find out who is swimming naked when the tide goes out." ### JPMorgan is blocking AI tools that log in to your bank account with your password. JPMorgan told Fortune it blocks outside AI tools from getting into accounts "by obtaining customers' banking credentials". In both the US and the UK, you may have to carry the loss if you shared your login, and it isn't settled how that works for an AI tool. So check which of your AI tools hold a bank password, and who has to sign off before money moves. [Read the story →](https://fortune.com/2026/10/15/jamie-dimon-ai-agents-meta-muse-jpmorgan/?ref=capitalfounders.io) ## New on the Site If a roll-up has approached your company, or you're weighing whether to sell, invest, or build, the founder's guide to AI-enabled roll-ups covers how these deals are put together and when to walk away. It now answers common questions and includes a one-page self-test: *Sell, Invest or Build*. Read it: [Founder's Guide to AI-Enabled Roll-Ups](https://www.capitalfounders.io/playbooks/ai-enabled-roll-ups/) This was [**Capital Signals**](https://www.capitalfounders.io/tag/capital-signals/) — weekly briefings on what's reshaping founder strategy on wealth. Go deeper: [Playbooks](https://www.capitalfounders.io/playbooks/) · [Wealth Architecture](https://www.capitalfounders.io/tag/wealth-architect/) · [Investment Strategy](https://www.capitalfounders.io/tag/investment-office/) · [Business Building](https://www.capitalfounders.io/tag/build-mode/) · [Life Design](https://www.capitalfounders.io/tag/life-os/) Found this useful? Forward it to a founder who's thinking about this stuff. Got a question or disagree with something? [Get in touch](https://www.capitalfounders.io/contact/). New here? [Subscribe](https://www.capitalfounders.io/#/portal) for one email a week. ⚠️ ****Disclaimer:** This content is for informational and educational purposes only. It is not investment, legal, or tax advice and should not be relied upon as such. The views expressed are the author's own and do not represent any employer, firm, or institution. All investing carries risk, including loss of principal. Past performance does not guarantee future results. 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