South African corporates hold significant cash balances. According to the South African Reserve Bank (SARB), non-financial companies held a record R1.8 trillion in bank deposits in July 2025 – up from R1.1 trillion in 2019.
This sharp increase is a clear indication that cash has become a material balance sheet allocation. However, it should not be seen as a temporary buffer.
Holding liquidity makes sense; leaving it unmanaged does not.
What began as a defensive posture during the pandemic has become structural, and as balances have grown, so has the responsibility to manage them with the same discipline applied to deployed capital.
When scale changes the conversation
Many companies hold cash against uncertainty – for acquisitions, capital expenditure, tax payments or simply as a safeguard. In a cautious economic climate, delaying deployment is understandable.
But when balances become significant, “waiting” becomes an active strategy. Where that cash sits, how it earns, and how it is taxed begin to matter.
Boards are increasingly applying the same governance lens to cash that they apply to other capital allocations: risk, diversification, liquidity and efficiency.
Why cash defaults to banks
For most corporates, excess cash remains in call accounts or fixed deposits with their primary bank. The reasons are clear: simplicity, familiarity and perceived safety.
Many finance directors do not have dedicated treasury teams. Capital preservation and liquidity are key performance priorities. Introducing new structures can feel like adding complexity.
Yet concentrating large balances with a single institution creates its own form of exposure. Counterparty risk is rarely interrogated with the same scrutiny applied elsewhere on the balance sheet.
Beyond call accounts: understanding CIS and fixed income funds
Collective Investment Schemes (CIS) are regulated, pooled vehicles that allow investors to access portfolios across asset classes. In the fixed income space, they focus on instruments such as treasury bills, money market instruments and high-quality credit. In the corporate cash context, conservative fixed income CIS funds are often used as an alternative to traditional bank deposits.
While these funds still hold exposure to banks, the difference lies in diversification and structure. Rather than concentrating exposure with a single institution, conservative fixed income CIS funds typically spread exposure across multiple banks and issuers within predefined credit limits and regulatory constraints.
In effect, corporates retain bank exposure but in a more diversified and structured form.
Even highly conservative fixed income CIS funds can, in certain rate environments, deliver returns 1%–2% above traditional call accounts while maintaining daily liquidity. Over large balances, that differential is meaningful.
After-tax returns: the overlooked variable
For investors, including corporates, the relevant return is not the headline yield but the net outcome after tax.
Interest income is generally taxed at the full corporate rate. Dividend income, depending on structure and shareholding profile, may be treated differently. Two solutions with similar pre-tax yields can therefore produce materially different after-tax results.
Corporate cash advisers are also noting the importance of corporates extending their thinking beyond traditional cash management approaches.
“Corporate cash has become a material allocation, not a footnote,” says Zelda Bredenhann from corporate cash adviser, Cinque. “When balances reach this scale, the conversation moves beyond just ‘is it safe?’ to ‘is it working efficiently?’ That includes understanding credit exposure, liquidity and – importantly for corporates – how income is taxed. Two solutions that look similar before tax can yield very differently after tax results.”
Cash management is therefore not only a liquidity decision but also a critical tax efficiency decision.
Suitability matters
Not all fixed income funds are designed for the same purpose. Some aim to enhance yield for retail investors. Others are structured with corporate balance sheets in mind to prioritise capital preservation, daily liquidity and tax-aware income generation.
As demand for more deliberate cash management grows, so too does the need for appropriately designed solutions.
As Ian Groenewald, CEO of TBI, an investment manager focused on income and capital preservation for retail and corporate investors, says, “We are seeing increasing need for fixed income solutions that are specifically structured for the corporate investor. The objective is not to stretch for yield, but to prioritise capital stability, liquidity and tax-aware income streams. When cash balances are large and strategic, structure matters.”
The role of independent advisers
For many finance teams, the challenge is not a lack of options, but the time and expertise required to evaluate them. They lack a dedicated treasury capacity and decision-makers to map cash to purpose and then restructuring exposure to align with governance requirements and corporate-specific circumstances.
The focus is not on replacing banks. Transactional banking remains essential. Rather, it is about ensuring that different pools of cash are aligned to their purpose, risk tolerance and tax profile.
A governance conversation
With cash representing a meaningful portion of corporate assets, leaving it on autopilot is itself a decision.
The real question for boards and finance teams is not simply whether cash is safe but whether it is structured with the same discipline applied to the rest of the balance sheet.
This conversation is gaining momentum. At current balance sheet levels, it is overdue.
