How To Make Effective Use Of Idle Funds Of Enterprises

Enterprises often generate large amounts of short-term cash in fund-raising and business activities.

Some are more liquid cash, some are relatively seasonally in business, and some new funds raised by listed companies.

These cash will usually idle for some time before they are pferred to capital investment and other business activities.

Looking at the majority of enterprises in China, these funds are very common. They are usually deposited in banks as demand deposits.

Little imagine, this is a great waste.

Cash can bring additional benefits to the business, even in the short run.

If we take active management of these idle funds, short-term profits can also be created for enterprises.

For a large number of idle funds, the difference between the annual earnings of 1% is not a small amount.

Then, how can we improve the efficiency and yield of funds?

Cash management in general enterprises is mostly limited to traditional ways such as deposits, bills, short-term treasury bonds and lending.

In fact, the annual interest rate for demand deposits is only 0.4%, and the yield is very low.

Even the seven day notice deposit is only 1.49%, and it has certain requirements for the deposit amount (500 thousand of the company). The central bank has no credit risk, good liquidity and high income, but the general organization can not buy it. Treasury bonds are the most secure and realizable ability to buy back, but it is necessary for the operators to have strong expertise and judgement ability in the money market. Only when the financial companies of the enterprise group meet the requirements can they enter the interbank lending market of the whole country, and most enterprises can not enjoy the convenience of borrowing.

Compared with the low yield of traditional tools, the revenue of new tools can be significantly improved.

At present, there are some super short-term cash management methods in the market.

Important help for the flow, such as monetary fund.

The IMF is an open fund that aggregates idle funds of the society, operated by fund managers, and safeguards by fund trustees. It is specialized in investing in risk-free money market instruments, which is different from other types of open-ended funds.

It is characterized by high liquidity and stable profitability, which is characterized by "quasi savings".

The IMF mainly invest in short-term monetary instruments (average duration is less than one year, with an average period of 120 days), such as treasury bonds, central bank bills, bank time deposit certificates, corporate bonds (AAA credit rating) and interbank deposits.

IMF has both savings substitution and cash management.

The three function not only has the security and convenience of similar demand deposits, but also yields significantly higher than the bank deposit rate of the same period.

The income of the IMF is calculated every day, and interest income is earned every day. Investors enjoy compound interest (and bank deposits are just a single interest). Monthly dividends are paid to fund shares and dividends are exempted from corporate income tax.

The general money market fund can also be pformed into other open-ended funds of the fund management company, which is efficient, flexible and low cost.

When the stock market is good, it can turn into a stock fund. When the bond market is good, it can turn into a bond fund. When the stock market and bond market do not have a good opportunity, money market funds are a good haven for investors. Investors can grasp all kinds of opportunities in stock market, bond market and money market in time.

In addition, the money market fund, as an open-end fund, can be freely subscribed and redeemed. It does not require any fee, convenient and quick, and convenient access to capital. It not only reduces investment costs, but also guarantees liquidity. It is called "demand deposits". It is known as "the king of cash management tools" in western developed countries.

Fund companies only need to maintain a small cash position for daily payments.

The redemption of general funds can only be realized on T+2 or T+1 days, and it can be realized and settled (due to different channels of purchase).

When the company needs the money, after redemption and settlement, the fund will return to your account in 1-2 days.