2 min read
Definition
Notional pooling lets a business (or group) offset the balances of several accounts for interest purposes without physically moving money — so a positive balance in one account offsets an overdraft in another, reducing net interest.
In plain terms
Rather than sweeping cash between accounts, the bank treats the pooled balances as one for calculating interest. A group with cash in one entity and an overdraft in another can cut its overall interest cost while keeping the accounts separate.
Why it matters
Pooling is a treasury tool for optimising interest across multiple accounts. See sweep account.
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