Corporate Overnight Funds: Why the term is often misleading

When companies look for options to temporarily park excess liquidity, the search almost automatically ends at the term "corporate overnight money." On comparison portals and provider websites, the market appears straightforward: compare interest rates, open an account, done. However, in practice, the situation is more complex. Today, very different products are summarized under the same term, which differ significantly in terms of legal, structural, and risk profiles. Those who do not understand these differences often compare apples with oranges.

The primary goal: short-term cash parking

Regardless of the provider, the goal is identical for most companies. Liquidity should remain available daily, be held with minimal risk, and ideally achieve a market-oriented yield. Whether a provider is formally a bank is of secondary importance. What matters more is how the money is legally structured, where the return originates, and what the insolvency protection looks like.

Classic corporate overnight money at banks

Classic corporate overnight money is based on a bank deposit. The money is held at a credit institution and accrues interest. This solution is easy to understand and legally clearly regulated. However, interest rates are often low, and statutory deposit insurance is typically limited to 100,000 euros. This may suffice for smaller liquidity buffers, but for larger cash reserves, it is often inefficient.

Interest-bearing business credit (E-money)

Providers like Holvi or Vivid Money advertise with interest on business accounts. Legally, however, this does not constitute overnight money, but rather credits at E-money institutions. The money is conveniently integrated into payment transactions and available daily, but does not fall under classic deposit insurance. The interest often depends on promotions or the provider's structure. These solutions are primarily suitable for operational working capital, less so for larger liquidity reserves.

Cash management via the money market (segregated assets)

A third category includes money market-based cash management solutions like UnitPlus Business. Here, liquidity is invested in very short-term money market instruments and legally held as segregated assets. Thus, the capital is separated from the provider, even for larger amounts. The return closely follows the money market, such as €STR or Euribor, and the money remains available daily. In return, there is no guaranteed interest rate, but a very small, market-driven fluctuation.

Conclusion: Structure beats marketing

The term "corporate overnight money" is no longer a clearly defined product type today. Classic bank deposits, interest-bearing E-money balances, and money market-based solutions may all serve the same purpose, but they fundamentally differ in structure, risk, and scalability. A good cash decision, therefore, does not start with the interest rate but with the question of which structure suits one's own liquidity.

Comparison at a glance

Companies that clearly classify these differences avoid inconsistent comparisons and make more informed cash management decisions—regardless of how providers label their products.