Rethink how you manage your cash

We live in a new world, where the norm has become low interest rates. Parking funds into a bank account these days gives you around 0.10%-0.25% (if you’re lucky you might get 0.50%). Well I guess we are luckier in Canada than those living in Europe, where bank deposit rates are negative – yes you lose money by parking funds into a bank account there!

In a low interest rate environment, corporations need to rethink how to manage their cash instead of parking funds into a bank account. So how can CFOs and treasurers make a decent return on their cash held on the balance sheet? Keeping in mind safety and liquidity of your balances, you can actually make a lot more return on your cash than having it sit in a bank savings account. For example, a 30 day cashable GIC offers full liquidity after 30 days (holding period) with partial or full redemptions and has rates that are north of 1.00%. Pretty attractive if you are forecasting your cash 30 days out. 

There are various cash management products available that could add significant return to your bottom line. Our goal is to partner with our clients to deliver investment products that maximize their rates and match their cash flow forecasts and budgets. 

Your Dehal Investment Partners

Author:
Michael Dehal, MBA, CPA, CMA, CIM
Vice President & Portfolio Manager