Near-moneys
financial assets that can’t be used directly as a medium of exchange but can be readily converted to cash or exchange but can be readily converted to cash or demand deposits-savings deposits, certificates of deposit (CDS)
Near-moneys are financial assets that are not considered as money but can quickly be converted into cash or used as collateral to obtain credit. They include assets such as savings account deposits, money market accounts, short-term certificates of deposit (CDs), commercial paper, and treasury bills.
The difference between near-moneys and money is that money can be used directly as a medium of exchange for transactions. On the other hand, near-money assets cannot be used as a means of payment, but they can be converted into cash quickly and easily.
Investors usually use near-money assets as a place to park excess cash when they are not ready or willing to invest in longer-term assets like stocks or bonds. The advantage of near-moneys is that they offer higher yields than traditional checking accounts, but with less liquidity risk and volatility than longer-term investments.
In summary, near-moneys are financial instruments that can provide a relatively low-risk investment opportunity with stable returns. They are an important component of many investors’ portfolios because they offer stable returns with relatively low volatility and liquidity risk.
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