Bank Deposits & Investments: Call, Notice, Term and More

The bank deposit is treasury's default setting: familiar, simple, and configured by inertia rather than decision. Most corporate cash sits wherever it landed, in a current account paying nothing or a call account paying little, while the same bank would happily pay more for the same money if anyone asked. A significant part of bank revenue relies on you not asking.

Many flavours

The terms Call and Instant Access are often used interchangeably, they pay the least and give instant access. The difference is market and marketing rather than regulatory. Call money generally refers to corporate accounts, larger balances, and treasury desk relationships at the bank. Instant access is more commonly used to refer to retail balances, now genuinely accessible 24/7 via apps, but only up to certain withdrawal limits. Overnight deposits come next, you wait a day, you might get some small reward in exchange, or it might be a restriction on access applied to larger sums.

Notice accounts pay more for patience: your money returns 32, 95 or 182 days after you ask for it, which suits reserve cash you may need for longer term plans, but not this month.

Term deposits fix a rate for a defined period, with a catch worth reading twice: breaking one early costs a penalty at best, and some simply can't be broken, making that cash unavailable at any price until maturity.

The trade across all three is identical: yield for access. Price it against when you'll genuinely need the money, not against the discomfort of locking anything up.

Beware of informal access arrangements

Your account says 3-month notice; your relationship manager says they will give you access when you need. Sounds great, and probably will be as long as everything is going well, but when the sh*t hits the fan, the banks will fulfil their minimum legal obligation, not vague promises.

Does your confirmation explicitly state that you can access the funds? If so, it's the bank's problem, but you might have to make some noise about it. If not, don't rely on it in a crisis.

Where deposit rates come from

Banks price deposits off the central bank rate, minus their margin. With the ECB deposit facility at 2.25% in mid-2026, a corporate offered 0.5% on a call account is donating the difference.

You are competing with other cheap and more valuable sources of funding, sticky retail money, pensions, custody assets that rarely move or don't fight for higher rates, but the negotiating position is better than most treasurers assume.

Stable corporate deposits are a valuable source of funding, requiring less infrastructure to manage than massive retail deposit books. Better pricing is often only a request away.

Extra yield for extra risk

There are some other structures that commonly occur in the corporate cash world. These tend to occur when clients are particularly yield sensitive or have a higher risk appetite, or the bank's liability budget can't match the customer's expectations (i.e. they aren't currently trying to raise funds, so won't pay up for deposits). As mentioned in previous articles, these should be treated with caution, and only where the risk is fully understood and fits within the company's risk appetite and treasury management framework.

Common examples include:

Generally speaking, these have no place in a cautious treasury manager's arsenal.

The ladder beats the lump

The standard failure is one large term deposit maturing on one date: maximum breakage risk, maximum reinvestment risk, one rate for everything. Slice the same money into term deposits maturing regularly and across different institutions and the problems dissolve: something is always about to mature if cash is needed, rates average through the cycle, and no single decision carries the whole balance. Boring, effective, and easier to implement.

Bank resolution: not all banks are created equal, not all bank products are created equal

When considering your counterparty exposure, it is important to understand that not all exposure to the same bank gets treated the same in a crisis. Even deposit accounts get different treatment in a resolution.

The good news is that bank rules created since the global financial crisis have increased the amount of capital banks need to hold and created a whole new tier of bank obligations which are designed to reduce the need for a bail-out and protect day-to-day retail and corporate customers. They have however added complexity, and room for confusion, particularly for anyone who makes the mistake of assuming any exposure to the same institution is equivalent.

The prioritisation usually looks like this:

It's a big list, but realistically, corporate treasury should focus on a very narrow part of it (highlighted above). We only include the full list to make you aware of the other products, so you can recognise them if they come across your desk (and avoid them).

The list also highlights a few important points:

• Access to your deposits is important for 2 reasons:
  • How quickly you can access the funds when you need them, and
  • How quickly you can access the funds when you start worrying about your banks.
• Protection schemes (£85,000 FSCS, €100,000 in most EU schemes) are rounding errors at corporate scale.
• It is important to note that as you graduate from an SME to a large corporate, you suddenly get downgraded in the pecking order. If you haven't diversified your excess cash before that stage, this is definitely the time to start.

It's important to note that term, notice and call accounts all get the same treatment once they are sitting in the bank when it goes to the wall. The only value shorter term accounts have is that they might allow you to get the funds out before a bank reaches crisis point. Whatever the terms were before a resolution, once a bail-in occurs your deposit is now an unsecured loan to the bank, bundled in with all the other creditors in your tier.

The same job at three sizes