What is the liquidity status of bank notes compared to checking accounts?

Bank notes, which are physical currency, are considered more liquid than checking accounts because they can be readily used for transactions without any intermediate steps. Liquidity refers to how quickly and easily an asset can be converted to cash or used to make purchases.

When you have bank notes, you can spend them immediately at any point of sale without having to go through the banking system or rely on electronic processing. In contrast, checking accounts still involve a process of writing a check or using a debit card, which may not be accepted everywhere, and also requires the availability of funds that may not be instantaneously accessible.

Thus, while checking accounts allow for easy access to funds, the instantaneous usability of cash (bank notes) in most transactions makes them more liquid.