A repurchase agreement is a form of short-term investment. It is comprised of a package of securities that an investor buys from a financial institution, under an agreement that the institution will buy it back at a specific price on a later date. It is most commonly used for the overnight investment of excess cash from a company's cash concentration account, which can be automatically handled by the company's primary bank.
The typical interest rate earned on this investment is equal to or less than the money market rate, since the financial institution takes a transaction fee that reduces the rate earned.
A repurchase agreement is also called a repo.