Browse Market Structure

Money at Call and Short Notice: The Most Liquid UK Bank Assets After Cash

Market Structure

Money lent to other banks and non-bank financial institutions, repayable on demand or at up to 14 days' notice, secured loans bearing interest at low rates.

On this page

Money at Call

  • Definition: Funds lent out with the provision to be recalled at any time by the lender.
  • Interest Rates: Typically lower due to the high liquidity.

Money at Short Notice

  • Definition: Loans provided with a maturity period of up to 14 days.
  • Interest Rates: Slightly higher than money at call, reflecting the marginally increased risk.

Mathematical Formulas/Models

Interest Calculation on Money at Call and Short Notice:

$$ I = P \times r \times \frac{t}{365} $$

Where:

  • \(I\) = Interest earned
  • \(P\) = Principal amount
  • \(r\) = Interest rate per annum
  • \(t\) = Time period in days

Importance

The ability to lend and recall money quickly helps banks maintain liquidity, meet unforeseen cash demands, and earn interest. This practice is crucial in avoiding insolvency and fostering interbank trust and cooperation.

Revised on Monday, May 18, 2026
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