What Are Liquid Assets?

Accessing cash at the bank
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The financial world deals in many types of assets, both business and personal. Liquid assets are those most easily converted into cash. Assets are liquid if they can be converted into cash in a relatively short period of time, generally within 30 days.



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Cash on hand is a liquid asset. Any money in your possession or stored where you have ready access to it is considered a liquid asset. This includes money kept at home, on your person or in a safe deposit box. It may include money kept in another location such as at a family member's home or hidden on your property for emergencies.


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Cash Accounts

Check book
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Savings accounts and checking accounts are prime examples of liquid assets. Certificates of deposit and guardianship accounts are also liquid assets. Money market accounts also fall into the liquid asset category. Any of these accounts on which your name appears is a liquid asset. All of these account types allow the owner to access cash relatively quickly, making them liquid assets.



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Treasury bills are liquid assets as are stocks as they can be redeemed relatively quickly for cash. Mutual fund shares and U.S. savings bonds also qualify as liquid assets. Non-term life insurance policies also have a cash surrender value that constitutes a liquid asset.


Possible Liquid Assets

Signing a deed
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Some annuities allow the owner to redeem all or part of the annuity for cash. Promissory notes are also counted as liquid assets unless some reason exists for them to be excluded. Ownership of a contract for deed also can be counted as a liquid asset as it relates to the collection of payment on the principal each month. Retirement funds such as those in an IRA or 401k plan can be considered liquid if the need is to raise cash. Otherwise, they would be excluded from the list of liquid assets.


What Are Not Liquid Assets

Real estate and other property is a fixed asset
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Fixed assets have a cash value, but cannot readily be converted into cash. Their conversion takes time, making them illiquid. Real estate and other property is a fixed asset. Vehicles, burials and some forms of life insurance also do not qualify as liquid. Trust funds do not qualify as liquid assets as they are maintained for the care of another. Gold and gems may not be liquid assets as it may take time to find a buyer to pay the fair market value for these items.


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