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What is Call Money?

Wednesday, February 9, 2022

/ by Admin

 Call Money 

Call money, also known as "money at call," is a short-term financial loan that is payable immediately, and in full, when the lender demands it. Unlike a term loan, which has a set maturity and payment schedule, call money does not have to follow a fixed schedule, nor does the lender have to provide any advanced notice of repayment. 

 Understanding Call Money

 Call money is a short-term, interest-paying loan from one to 14 days made by a financial institution to another financial institution. Due to the short term nature of the loan, it does not feature regular principal and interest payments, which longer-term loans might. The interest charged on a call loan between financial institutions is referred to as the call loan rate. 

 Key Takeaways 

 Call money is any type of short-term, interest-earning financial loan that the borrower has to pay back immediately whenever the lender demands it.  Call money allows banks to earn interest, known as the call loan rate, on their surplus funds.  Call money is typically used by brokerage firms for short-term funding needs.

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