Consider the following liquid assets :
- Demand deposits with the banks
- Time deposits with the banks
- Savings deposits with the banks
- Currency
The correct sequence of these assets in the decreasing order of liquidity is
1-4-3-2
4-3-2-1
2-3-1-4
4-1-3-2
Answer is Right!
Answer is Wrong!
This question was previously asked in
UPSC IAS – 2013
Liquidity refers to the ease with which an asset can be converted into cash without affecting its price. Currency is the most liquid asset as it is readily spendable cash. Demand deposits (like current accounts) are highly liquid as funds can be withdrawn on demand. Savings deposits are generally less liquid than demand deposits due to possible limits on withdrawals, though in practice, they are often very liquid. Time deposits (like Fixed Deposits) are the least liquid among these options, as premature withdrawal incurs penalties.