Banking Term: Liquidity

Find important banking term that is useful in upcoming banking exam.

Mar 19, 2015 14:31 IST

It is the degree to which, an asset can be quickly and cheaply turned into money, which by definition, is completely liquid.

A current account bank deposit is a liquid asset because it can be withdrawn immediately at little cost.

An office building by contrast will take a considerable time to dispose of and estate agent’s fees and other costs will be incurred

A company or individual is said to be liquid if a high proportion of its or his assets are held in the form of cash or readily marketable securities.

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