Despite the similarities with secured loans, deposits are actual purchases. However, since the purchaser only temporarily owns the guarantee, these agreements are often considered loans for tax and accounting purposes. In the event of bankruptcy, pension investors can, in most cases, sell their assets. This is another difference between pension credits and secured loans; For most secured loans, insolvent investors would remain automatic. Deposits with a specified maturity date (usually the following day or the following week) are long-term pension transactions. A trader sells securities to a counterparty with the agreement that he will buy them back at a higher price at a given time. In this agreement, the counterparty receives the use of the securities for the duration of the transaction and receives interest that is indicated as the difference between the initial selling price and the purchase price. The interest rate is set and interest is paid at maturity by the trader. A repo term is used to invest cash or financial investments when the parties know how long it will take them. For the buyer, a repot is an opportunity to invest cash for an appropriate period (other investments generally limit the durations).

It is short-term and safer as a guaranteed investment, since the investor receives guarantees. The liquidity of the deposit market is good and interest rates are competitive for investors. Money funds are big buyers of retirement transactions. If interest rates are positive, the pf redemption price should be higher than the original PN selling price. A decisive calculation in each repurchase agreement is the implied interest rate. If the interest rate is not favourable, a reannument agreement may not be the most effective way to access cash in the short term. A formula that can be used to calculate the real interest rate is down: in September 2019, the US Federal Reserve intervened in the role of the investor to make funds available in the pension markets, when overnight interest rates increased due to a number of technical factors that limited the supply of available funds. [1] The same principle applies to deposits.