What differentiates notional pooling from ZBAs and sweep structures?

Notional pooling is distinct in that it serves as a liquidity management tool that does not necessitate the physical movement of funds among accounts. This method aggregates balances across multiple accounts for the purpose of calculating interest while keeping the funds in their respective accounts without transferring them.

This characteristic allows businesses to maximize their available liquidity and manage their cash positions effectively. By using notional pooling, organizations can benefit from consolidating balances for interest calculations, which can result in lower interest expenses and improved cash management, all without the complexities associated with physically moving funds.

In contrast, other structures like Zero Balance Accounts (ZBAs) or sweep accounts involve actual transfers of funds to maintain specific balances or optimize interest earnings. Therefore, the emphasis on liquidity management without physical fund movement accurately reflects what differentiates notional pooling from these alternatives.