Manage several accounts as one
Target balancing is a technique that brings the balances of your accounts worldwide to a predetermined level by offsetting amounts above and below a predetermined target. The target can be either zero or any other amount you determine.
In other words, any credit balance in a subordinate account is transferred to the master account and any debit balance is offset from the master account.
Target balancing allows effective cash centralisation: it leaves you with only one account to manage and it improves the net interest you receive on your balances since interest charges on overdrafts are reduced – or even cancelled out – through the levelling of negative balances.
Target balancing may, however, have legal and fiscal implications, since intracompany transfers are viewed as loans in some countries.