Liquid Asset Definition
A liquid asset is a type of asset that is cash or easily converted into cash. Its cash value remains largely unchanged when the asset is sold.
For an asset to be considered liquid, it must have interested buyers with the ability of ownership to be transferred easily. Liquid assets are assets the owner, whether a person or business, can turn into cash quickly during a financial emergency or opportunity.
Examples of Liquid Assets
Cash is considered the most common type of liquid asset. Funds deposited in savings and checkings accounts are considered highly liquid assets.
Examples of other liquid assets include:
- Certificate of deposit (CDs)
- Money market accounts
- Cash management accounts
- Mutual Funds
- Government bonds
- Tax refunds