Bank deposit accounts that offer the privilege of writing checks against the balance of funds in the account. These accounts are the primary type of demand deposits that are part of the M1 money supply.
Currency in circulation refers to the paper money and coins that are circulating within an economy and are counted as part of the total money supply, which also includes demand deposits in banks.
A Negotiable Order of Withdrawal (NOW) account is a type of deposit account that allows the owner to write drafts against the deposited funds, permitting the account holder to earn interest while maintaining the ability to withdraw funds on demand.
Understanding the Federal Reserve System's rule mandating the financial assets that member banks must keep in the form of cash and other liquid assets as a percentage of demand deposits and time deposits.
