Group account description
Nordea’s Group Account is a solution in which all liquidity is concentrated in one account. The system is very flexible and can be adapted entirely to your group’s needs and wishes. By choosing Group Account, your group will obtain a reduction in its total balance sheet as well as in its total balance with Nordea. Each entity will have its own sub accounts from which all transactions are executed and which will be perceived as ordinary transaction accounts from the entity’s point of view.
Group account service will be set up for each currency separately. The Group Account system may have two types of accounts: top account, and sub accounts. The following illustration is a simplified model, which shows how the balance on the top account is calculated.
Group account structure
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DefinitionsGroup Account services and accounts belonging to it are called with different names or expressions in different countries even if the meaning is the same. In order to clarify these expressions here is a short list of definitions:
Top account The balance of the top account shows the sum of the balances on all sub accounts. The closing balance forms the basis for interest calculation and the top account holder pays/receives interest. Interest rates and overdraft limits agreed with the bank are registered on this account. External interest will be calculated daily based on the top account balance and accrued interest will be capitalised on a monthly basis. Sub account Each participant included in a cash pool will hold a sub account and is able to monitor the balance and initiate transactions through the local electronic banking system (Solo Multi bank/Baltic Edition) as if this was a traditional bank account. The balance is a position within your group, not with Nordea. Furthermore, as transactions are never booked on the top account, the parent company or the Group Account holder also needs a sub account for its own purposes. This account is called as a parent account. There are no limitations within the system as regards of participants. |
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Overdraft facilityAny overdraft facility agreed with the bank is registered on the top account. Internal limits may flexibly be set for the sub accounts according to your choice. Internal interest calculationInternal interest calculation can be adapted flexibly on sub accounts according to the requirements in your group, naturally observing rules and regulations regarding transfer pricing, arm’s length principles etc. Cover controlCover control is always made against the top account balance (+ possible overdraft facility). In addition, should the Group
Account holder wish so, the cover control can also be made against the sub account balance (+possible internal credit limit).
Different cover control rules can be applied on different sub accounts. Nordea produces reports of internal interest calculation. These reports include a summary of internal interests on the sub accounts and day-to-day calculations of internal interest on each sub account. Customer interfaceGroup account holder will use group account service trough Solo Multibank. Legal mattersTop account is the only legally binding account towards bank, which summarise all the sub accounts balances together and describes how much bank has receivables (in real time) from Group Account holder or how much bank is in debt for Group Account holder. Sub account is a technical account – not a real bank account – trough which a Group Account is used by the pool- partcipating companies. |
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Additional information:
Contact us if you want more information or have questions about Group Account.
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