A repurchase agreement (repo) which matures after one day of entering into it. In other words, the term of an overnight repo is one day. This agreement allows securities dealers and banks to finance their holdings of Treasury bills, notes, and bonds, overnight. The dealer or bank sells underlying securities to an investor who runs a temporary surplus of cash (idle funds), and simultaneously agrees to purchase them back the next day.

Longer-term repo is known as term repo.

Overnight repos are also known as overnight repurchase agreements or overnight RPs.