"Banks have savings accounts for customers who want to keep their money safely for short-term use. They offer some interest on the amount depending on withdrawal limits and similar terms. There are different types of savings accounts for customers. One is the high-yield savings account, which offers a relatively higher interest rate. However, it comes with some strict restrictions to be able to collect the interest. Banks also require customers to maintain a certain balance to keep their accounts running."
"Cash pooling is a completely different concept, even if it is a way to save money. It applies mainly to companies that pool their funds together in a shared bank account system. To make it easier to understand, consider Google, which owns different subsidiaries around the world. Instead of each subsidiary handling its finances, all the companies pool their funds in one account."
Bank savings accounts offer insured, low-risk storage for short-term funds and pay modest interest that varies by account type and withdrawal limits. High-yield savings accounts provide higher rates but impose stricter conditions and minimum balances. Central bank insurance protects deposits up to set limits, making bank savings suitable for short-term goals like rent or vehicle purchases. Cash pooling is a corporate mechanism where subsidiaries combine balances into a centralized account to optimize liquidity. Surplus units lend to those with deficits, reducing reliance on external loans and saving on high borrowing costs. Cash pooling primarily benefits companies with multiple entities rather than individual savers.
Read at London Business News | Londonlovesbusiness.com
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