Cash pool and Cash reserves: Difference between pages

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imported>Doug Williamson
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imported>Doug Williamson
(Add 'back-up'.)
 
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A cash pool is a structure involving several related bank accounts whose balances have been aggregated for the purposes of optimising interest paid or received and improving liquidity management. A cash pool can be physical or notional.  
#The total of cash deposits, short-term bank deposits, money market instruments and Treasury bills.
#An organisation's cash reserves are the back-up funds available to meet its needs for cash, including unanticipated needs and opportunities.


A physical cash pool is a concentration account used for the purposes of managing liquidity. Surplus funds are physically concentrated into the account in order to maximise interest. Deficit accounts are covered by transfers from the cash pool in order to minimise overdraft interest.


A notional cash pool is a structure involving several related accounts whose balances have been aggregated for the purposes of optimising interest paid or received.  In other words a bank looks only at the total balance of the accounts in the notional pool when calculating interest, but there is no physical movement of funds.
Sometimes also known as 'strategic cash'.




== See also ==
== See also ==
* [[Aggregation]]
* [[Cash]]
* [[CertICM]]
* [[Concentration account]]
* [[Consolidation]]
* [[Liquidity]]
* [[Master account]]
* [[Notional pooling]]
 
 
==Other links==
[http://www.treasurers.org/node/9923 The pros of pooling, Sarah Boyce, The Treasurer, March 2014]
 
[http://www.treasurers.org/node/8824 Take the plunge, The Treasurer, March 2013]

Revision as of 14:35, 15 July 2015

  1. The total of cash deposits, short-term bank deposits, money market instruments and Treasury bills.
  2. An organisation's cash reserves are the back-up funds available to meet its needs for cash, including unanticipated needs and opportunities.


Sometimes also known as 'strategic cash'.


See also