Idle Funds

Written By
Paul Tracy
Updated August 5, 2020

What are Idle Funds?

Idle funds are monies that are not invested.

How Do Idle Funds Work?

Money, like people, must work in order to earn money. And just as when people do not work, when money is not invested, it is not earning money. It is idle.

Why Do Idle Funds Matter?

From a strictly financial perspective, idle funds are wasted money. When inflation is increasing, idle funds are even dangerous because the longer they are idle, the less they are worth.

From a consumer perspective, it is often necessary to keep some funds "uninvested" in a checking account or similar in order to pay bills and whatnot (companies face this same issue). The idea is to use forecasting and budgeting to keep these idle funds to a minimum, however.