Which of the following is/are example(s) of ‘Near Money’ ?
- Treasury Bill
- Credit Card
- Savings accounts and small time deposits
- Retail money market mutual funds
Select the correct answer using the code given below :
1 only
2 only
1, 2 and 3
1, 3 and 4
Answer is Right!
Answer is Wrong!
This question was previously asked in
UPSC CDS-1 – 2016
Near money refers to assets that are highly liquid and can be easily converted into cash with little or no loss in value. They serve as a store of value and can perform some functions of money, though they are not directly used as a medium of exchange in the same way as currency or demand deposits. Treasury Bills are short-term government securities, highly liquid and considered near money. Savings accounts and small time deposits can be readily accessed or converted, making them near money. Retail money market mutual funds invest in short-term, high-quality debt and are typically redeemable on short notice, thus qualifying as near money. A Credit Card is a means of borrowing money, not an asset that represents near cash; it facilitates transactions but is a liability for the user until repaid.