Notional pooling

Banking

The technique used by banks for calculating interest on balances in a notional cash pool.

Excess funds in the accounts of a company or its subsidiaries are used to offset deficits in other company accounts for the purpose of determining interest earned or owed. Funds are not physically moved.

Notional pooling is also referred to as interest offset pooling.

See also

• Cash concentration
• Cash pool
• CertICM
• Cross-guarantees
• Interest rate enhancement
• Legal implications of cash pooling structures
• The future of pooling
• Virtual pooling