Notional pool

Cash and liquidity management.

A notional cash pool is a structure involving several related bank 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.

Bank models evolving

"The world of cash management and payments is evolving in response to changes in bank business models as a result of regulation (ie the move away from notional pools)."

Michelle Price, associate policy and technical director, Association of Corporate Treasurers, The Treasurer, August 2018, p24.

See also

• Aggregation
• Cash pool
• Concentration account
• Consolidation
• Legal implications of cash pooling structures
• Notional pooling
• Regulation

Treasurer articles

The pros of pooling, Sarah Boyce

Take the plunge, Brendan McGraw