Near Money refers to those assets which cannot be used immediately to buy goods and services, but which can be converted into money very easily and without loss in their values. Following are example of Near Money :-
- Time or Fixed Deposits
- Bills of Exchange
- Treasury Bills
- Bonds
- Shares
- Policies of Life Insurance Companies
–Time or Fixed Deposits :-
It refer to those amount which are deposited in the banks for fixed period. It can be withdrawn before the expiry of the specified period, in case of emergency, but premature withdrawn may result in loss of values.
–Bills of Exchange :-
It is an instrument of credit in which debtor is ordered to pay with interest the amount of loan on the expiry of specified period, say 90days.
–-Treasury Bills :-
Are those instruments of credit on the basis of which government gets loan from the public for short period.
Bonds :-
It refers to those document on whose basis government gets loan for a longer period. Bonds issued by firms & industries are called debentures.
Shares :- Joint stocks companies collect their funds by issuing shares to the public. The shareholder can encash their shares by selling the same in shares market.
Policies of Life Insurance Companies :-
On the security of policies of life insurance, loans can be taken from LIC Companies.
