The safety and convenience of checks has made checkable deposits a large component of the M1 money supply.
People can convert checkable deposits into paper money and coins on demand. Checkable deposits are the debts or liabilities of commercial banks. Checkable deposits are basically the available balance in the account against which the checks and demand drafts can be made. Fixed account deposits are non-checkable in nature. The high liquidity of checkable deposits allow easy access to depositors to their funds. Liabilities are the items which the bank owes to someone else. It may be a deposit by the person, firm or another bank itself or any borrowing made from someone. Different kinds of checks are:
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