We wrote earlier this week on the "2026 AFP Liquidity Survey." (See our June 22 News, "AFP 2026 Liquidity Survey: Increase in Corporate Cash; Stablecoins Tiny.") Today, we continue our excerpts from the annual survey of corporate investors' cash habits. Discussing "Current Allocations of Short-Term Investments," AFP says, "Companies invest in just a few vehicles, averaging 3.03 for cash and short-term holdings, an increase from the 2.57 reported in 2025. Most organizations continue to allocate a large share of their short-term investment balances -- an average of 83% -- in safe and liquid investment vehicles: bank deposits, money market funds (MMFs) and Treasury securities. This result is three percentage points higher than the 80% reported in 2025. The typical organization currently maintains 42% of its short-term investments in bank deposits. This allocation is four percentage points lower than last year (2025) but is 13 percent lower than the 55% reported in 2022, and significantly lower than both the 52% reported in 2021 and the 51% in 2020. The figure has not reached a level as low as 42% since 2011." (Note: To those attending our Money Fund Symposium this week, welcome to Jersey City! Attendees and Crane Data Subscribers may access the MFS Conference Materials here.)
AFP writes, "Current allocations in Government/Treasury money market mutual funds are 19.5%, a decrease of 0.9 percentage points from the figure reported in 2025. The allocation is highest organizations with annual revenue of at least $1 billion (22.1%). Allocation to Treasury securities (including bills, notes and bonds) is 12.1%, higher than the 8.7% reported in 2024 but very similar to the 12.4% reported in 2024. This allocation is more common for companies with annual revenue less than $1 billion, and for those that are net investors and investment grade than for other organizations."
Shifting to "Stablecoin And Tokenized Products," they write, "Over one-third of respondents are unfamiliar regarding the status of stablecoin/tokenized utilization at their organizations, while 55% are aware but not exploring case use. Only 1% are conducting pilots using stablecoins or tokenized funds, while the remaining 9% are in the process of actively exploring use cases."
It continues, "Stablecoins and tokenized products are new, and most treasury professionals continue to be cautious of them until regulations are clear. The GENIUS Act, passed in July 2025, set a federal framework with 1:1 reserves and banking-like oversight. Regulators such as the Office of the Comptroller of the Currency (OCC) and FinCEN are working on rules, expected to be fully implemented by 2027. Tax and accounting regulations are also pending. Nearly half of all respondents (47%) say that tokenized products or stablecoin will not matter at their organizations in the next three years, while 20% are unsure. Only 7% report that the evolution of stablecoin/tokenized products will be either extremely or very relevant at their organizations in the next three years, while 26% think these products will be moderately or slightly relevant."
A section on "Money Market Funds," tells us, "Various drivers play a role in the selection of money market funds. The three factors that play the most important role are yield, fund ratings and stable net asset value (NAV). Sixty-four percent of treasury professionals cite yield ratings as a primary driver (among the top three drivers), while 57% cite stable NAV and 51% cite fund ratings as having a significant role when selecting a mutual fund."
It adds, "When selecting money market funds, several other primary drivers influence decision making: Many investors prioritize compliance with their investment policies, ensuring that underlying assets are permissible and provide safety of the principal; ESG considerations also play a role, with some opting to invest in funds with environmental, social, and governance criteria or those using negative screening; Customer service and ease of access to funds are important factors; Historical fund performance and the fund's safety, liquidity, and return profile also influence fund selection; Policies such as daily or late-day cut-off times for transactions, redemption policies, and past experiences with redemption issues can affect fund selection. Ultimately, these considerations collectively guide the selection process to ensure both compliance and optimal outcomes for investors."
It continues, "Forty-one percent of respondents expect that, with the advent of real-time payments, the money market industry will provide 24/7 liquidity -- higher than the 38% who expressed this view in the 2025 survey. Thirty-three percent of respondents are unsure if real-time payments operating in a 24/7 environment will require the money market industry to provide 24/7 liquidity. Tokenized products like money market funds are making this scenario increasingly probable. After much discussion, optimism about the future is now rising."
They write, "Eighty-six percent of respondents report that their organizations would select real-time money market funds and 68% would choose real-time investment sweeps if those options fit within the parameters of their companies investment policies. Real-time earnings credit rates and real-time investment options to 'follow the sun' are less likely preferred choices for organizations when selecting investment vehicles (cited by 45% and 24% of respondents, respectively)."
They add, "Banks continue to be major depositories for companies' U.S.-based cash and short-term investment holdings. This year's survey results show that the percentage of cash and short-term investments being held currently at banks at 42%. While that is lower than percentages reported in the past few years, bank deposits continue to be the investment vehicle currently holding the largest share of organization's cash and short-term investment holdings.... Most respondents, 81%, consider their organizations' overall relationship with their banks to be a significant determinant in bank selection -- three percentage points lower than in 2025. Sixty percent of financial professionals say that the credit quality of a bank is a deciding factor -- 8 percentage points lower than in 2025. Other factors determining bank selection are counterparty risks, which at 54% is an 11-percentage-point increase from last year. This is closely followed by yield/interest rates offered on deposits, cited by 51% of organizations."
The survey says, "Organizations rely on a variety of instruments for their cash and short-term investments. The most frequently used bank products are interest-bearing deposit accounts, cited by 68% of respondents -- three percentage points lower than in last year's survey. Overnight sweep investment accounts are used by 56% of organizations. Although use of this product was not tracked last year, it is notable that bank sweeps remain strong even as overall deposits declined. Time deposit products are used by 33% of organizations, 7 percentage points lower than last year. The use of structured bank deposit products (28%) increased four percentage points from the 2025 survey. Use of hybrid deposits (ECR and interest-bearing) also decreased four percentage points from last year to 24%, but continues to be higher than the 17% reported in the 2022 survey. Twenty-one percent of organizations use non-interest-bearing accounts."
Finally, they state, "In 2025, the Federal Reserve cut interest rates by 75 basis points. Typically, money funds -- due to their weighted average maturity (WAM) -- can insulate yield changes as much as their WAM allows, so it is likely that companies sought the relatively same amount of safety in other products like Treasuries that might pay a slightly higher rate of interest over a select time period. Likewise, bank sweeps could also offer the same option as well and pay a slightly higher rate than interest-bearing deposits or earnings credit rates."
