Idle cash balances are held for unplanned purchases.
Idle cash balances refer to the extra money that someone or an organization has on hand, but isn't currently being used for any specific purpose. It's like having spare change in your pocket or money in a savings account that you haven't allocated for a particular expense.
When you have idle cash balances, you might choose to hold onto that money until an unexpected expense comes up or until you decide to make an unplanned purchase. For example, if your car breaks down or a family member gets sick, you may need to spend money that you hadn't planned for. By having idle cash balances on hand, you can be better prepared for these types of situations.
In contrast, if you have a planned purchase in mind, such as buying a new car or house, you would likely allocate your money specifically for that purchase and not consider it as idle cash balances. Likewise, if you're considering investing in bonds or shares, you would be making a deliberate choice to invest your money rather than holding onto it as idle cash balances.