What is Real Money? Let's Learn About It!

Examples of Real Money – You already know that money is legal tender. Money is also called the most valuable asset. Based on its function, money is the most important element in the economic field.

Money also has two types! Are you unfamiliar with the term "real money"? What is it? So, for those who don't know, don't worry! This article, Whizmin will explain the meaning, examples, types, and even their difference from demand deposits!

Come on, and remember to read it until the end, okay?

Read also: What Is Idle Cash?

What Is Real Money?

What is Real Money? Let's Learn About It!

Real money is issued by a country's Central Bank, and its use is regulated by state law. Indonesia has two types of real money, namely banknotes and coins.

Law concerning Principles of Central Bank no. 13 of 1968 Article 26 Paragraph 1 states that "Bank Indonesia (BI) is the only party that has the right (right of right) to issue banknotes and coins in Indonesia."

Well, this real money is a good means of exchange or payment, which is usually used by the public for various daily transactions!

Difference between Real Money and Demand Deposits

What is Real Money? Let's Learn About It!

Before you know the difference between currency and demand deposits, you must first understand demand deposits. So demand deposits are money issued by commercial banks. Demand deposits also have various forms!

The forms of demand deposits are stocks, checks, bills of exchange, giros or credit transfers, credit cards, and telegraphic transfers. Well, from here, you can tell the difference between them. telegraphic transfers. Well, from here you can definitely tell the difference between them, right?

The central bank issues real money as a good medium of exchange. At the same time, demand deposits are money issued by commercial banks through money orders, giros or credit transfers, and others.

Based on its function, real money is used for daily transactions. In contrast, demand deposits are used when a company or an entrepreneur conducts marketing with a large denomination that you cannot exchange through banknotes and coins.

In addition, based on their nature, the two are different. Real money is significant always to be available because people are required to use it when making daily transactions.

Unlike demand deposits, which they are not required to have in one's possession. This is because not everyone can make transactions with that money.

Types and Examples of Real Money

According to the Basic Law of Bank Indonesia Number 11 of 1953, currency based on its characteristics consists of two types, which are:

1. Bank Money

Source: https://lifepal.co.id/media/agar-gak-salah-paham-ini-fungsi-bank-indonesia-yang-sebenarnya/

Banknotes are money issued by the Central Bank, like Bank Indonesia, in the form of banknotes and coins. The characteristics of this bank's money are:

– Issued by the Central Bank.

– The signature of the minister of finance accompanies the money.

– There is the name of the country's Central Bank.

2. State Money

State money is money issued by the government, which basic material is plastic. However, state money is currently no longer in circulation in Indonesia. As for its characteristics, they are:

– Issued by the government.

– The money is accompanied by the signature of the minister of finance.

– There is a country name listed in the money.

– Its use is guaranteed by law.

As already explained, real money consists of two types, which are paper money and coins. Here are the examples:

a. Paper Money

Quoted from bbpk.go.id, banknotes issued by Bank Indonesia are made of cotton fiber and a mixture of fabrics. Inside the banknotes there is a special stamp and a picture that shows the identity of the banknotes.

Examples of Indonesian rupiah's banknotes are IDR 2000; IDR 5000; IDR 10,000; IDR 20,000; IDR 50,000; IDR 75,000; IDR 100,000.

Of course, you are no stranger to the paper money mentioned, right? Yup! We use banknotes for various transactions, such as buying snacks or things you need and want.

However, paper money still has its advantages and disadvantages. The advantages are that it is practical to use, easy to carry anywhere in large quantities, and can be folded and stored easily.

Meanwhile, the disadvantages of banknotes are that they float easily because they are thin, easily counterfeited, and flammable.

b. Coins
What is Real Money? Let's Learn About It!

According to uangindonesia.com, coins are money made of three materials, which are brass, aluminum and nickel. The examples of coins are IDR 50, IDR 100, IDR 200, IDR 500, IDR 1000.

Like paper money, coins also have their advantages and disadvantages. The advantages of coins are that they are made of durable materials, have good quality, and have a more practical shape than banknotes because they are smaller.

Meanwhile, the drawbacks are that coins are slightly heavier than banknotes if carried in large quantities, can be lost easily, and have limitations due to their material.

Read also: Let's Get Know the Difference between Real and Fake Money

So, that's the explanation and examples of real money. How is it? Hopefully, this will be helpful and motivate you to save permanently so that you'll have lots of money.

Remember to download and use the Whiz financial application. so that you can manage your finances better.