Near Money

AAA

DEFINITION of 'Near Money'

An economics term describing non-cash assets that are highly liquid, such as bank deposits, certificates of deposit (CDs) and Treasury Bills. Central banks, economists and statisticians may utilize near money when determining the current money supply. Near money refers to assets that can be quickly converted into cash. Also called quasi-money.

INVESTOPEDIA EXPLAINS 'Near Money'

Examples of liquid assets that are near money include bonds, money markets, savings accounts and widely traded foreign currencies. Assets that are considered near money may differ depending on the time frame that is used in the definition. Bank accounts, such as savings accounts, allow instant conversion to cash with no penalties. Other near money assets may take longer to access or may incur penalties, such as early withdrawal from a certificate of deposit.

RELATED TERMS
  1. Money Supply

    The entire stock of currency and other liquid instruments in ...
  2. Central Bank

    The entity responsible for overseeing the monetary system for ...
  3. Federal Deposit Insurance Corporation ...

    The U.S. corporation insuring deposits in the U.S. against bank ...
  4. Economics

    A social science that studies how individuals, governments, firms ...
  5. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, ...
  6. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. ...
RELATED FAQS
  1. How do open market operations affect the U.S. money supply?

    Formulating a country's monetary policy is extremely important when it comes to promoting sustainable economic growth. More ... Read Full Answer >>
  2. Which is NOT an element of M2 money supply?

    A. Dollar-denominated deposits outside the U.S. B. Cash in circulation C. Money in checking accounts D. Money in savings ... Read Full Answer >>
  3. How does transfer pricing help business?

    Transfer pricing involves the trade of goods or services between two related companies, and both can come out the winner. ... Read Full Answer >>
  4. How can I create a yield curve in Excel?

    You can create a yield curve in Microsoft Excel if you are given the time to maturities of bonds and their respective yields ... Read Full Answer >>
  5. How do I calculate my effective tax rate using Excel?

    Your effective tax rate can be calculated using Microsoft Excel through a few standard functions and an accurate breakdown ... Read Full Answer >>
  6. How important are contingent liabilities in an audit?

    Contingent liabilities, when present, are very important audit items because they normally represent risks that are easily ... Read Full Answer >>
Related Articles
  1. Economics

    What Is Fiscal Policy?

    Learn how governments adjust taxes and spending to moderate the economy.
  2. Economics

    Monetarism: Printing Money To Curb Inflation

    Learn how Milton Friedman's monetarist views shaped economic policy after World War II.
  3. Active Trading

    Leading Economic Indicators Predict Market Trends

    Leading indicators help investors to predict and react to where the market is headed.
  4. Investing Basics

    Understanding The Time Value Of Money

    Find out why time really is money by learning to calculate present and future value.
  5. Technical Indicators

    The Basics Of Money Flow

    Learn how this indicator uses both price and volume to record a more complete picture of price action.
  6. Technical Indicators

    On-Balance Volume: The Way To Smart Money

    This momentum indicator was designed to predict when major market moves would occur.
  7. Personal Finance

    What Are Central Banks?

    They print money, they control inflation, and much, much more. All you need to know about central banks is here.
  8. Economics

    What Is Money?

    It's a part of everyone's life, and we all want it, but do you know how it gains value and how it is created?
  9. Mutual Funds & ETFs

    Why You May Want To Be (And Stay) In Bonds

    Bonds are complicated, and it’s easy to feel intimidated or confused. Fortunately, you don’t need to be a numbers geek to be an informed investor.
  10. Mutual Funds & ETFs

    How To Short The U.S. Bond Market

    The U.S. bond market has enjoyed a strong bull run over the past few years as the Federal Reserve has lowered interest rates to historic low levels.

You May Also Like

Hot Definitions
  1. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  4. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  5. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  6. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
Trading Center