A Guide to the World of Banking Cash Management Products - Part 2

The bank provides an entity a day-to-day report, usually in the early in the morning, of their chargeable disbursement amount. This information of their disbursement amount enables the entity to invest their extra funds, usually in the money market.

4. Sweep Accounts. A sweep account is also a bank account that automatically transfers excess cash at the end of the day into higher yielding interest investment such as money market then moved these cash back into the account the next day. This allows the account holder to earn some interest for his unused cash overnight.

5. Zero Balance Account. A zero balance account is a checking account where funds are automatically transferred from a master account into one that is sufficient enough to cover checks tendered, thus, maintain zero balance. This is specifically used by companies to have more control over their disbursement.

6. Positive Pay. A positive pay is a service where bank pays only the checks listed in the records of an entity as specified. This reduces check fraud as suspicious checks are verified from the issuer for approval. A variant that is less costly would be for the entity to monitor issued checks himself and alerts the bank for checks that he refuses to pay.

As more and more banks continue to explore ways to deliver banking cash management products in various forms of solutions and services, the end beneficiaries are entities who are empowered to maintain the good cash of their businesses through these products and services. Whatever the cost of these products and services is certainly compensated by the gains from their usage.

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