when a check is brought to a bank to be cashed or deposited the money is withdrawn from the payor s bank account 
a certificate of deposit cd is a negotiable instrument offered by most banks the bank pays the customer a set amount of interest in return for depositing money for a set period of time which may be as little as three months or as long as five years or more a cd is negotiable in the sense that the customer may withdraw the balance on demand although that means losing some of the interest and paying penalty fees a promissory note is a document in which one party promises to pay another party a specific amount at a predetermined date in the future a promissory note contains similar financial details to other negotiable instruments including the amount owed date of issuance interest rate and the signature of the issuer or payor promissory notes are typically used to obtain financing from a source other than a financial institution however promissory notes are issued by the debtor the person who owes the money rather than the creditor as is typical for most credit transactions a bill of exchange is essentially a post dated check that does not charge interest on the amount owed it is a binding agreement in which one party is responsible for paying another party on demand at a future date bills of exchange are commonly used in international trade between importers and exporters it is essentially a pay on delivery system a time draft a type of bill of exchange makes a demand for payment at some point in the future a time draft is typically used in international trade and allows the buyer the importer time to pay the seller of the goods the exporter a sight draft is also used in international trade in it the importer agrees to pay the stated amount as soon as the goods are delivered negotiable vs non negotiablenon negotiable indicates that the price of a security or terms of a contract cannot be modified non negotiable can also refer to a security that cannot easily be transferred from one party to another in lease agreements the monthly amount owed by the tenant is almost always non negotiable the landlord has established a fixed monthly rent or lease payment for the duration of the contract other contracts might mix negotiable and non negotiable terms an employment agreement might allow the salary to be negotiated but the employee conduct policy would be non negotiable in this case negotiable means that a contract s terms can be modified depending on the circumstances and parties involved certain securities are non negotiable as in the case of a u s government savings bond which can be cashed only by the bond s owner negotiable securities can be transferred exchanged or resold between different people coins and paper money are negotiable securities negotiable securities are considered liquid meaning they can easily be transferred or sold in the market non negotiable instruments are considered illiquid since they cannot be resold in the market before signing a contract it s important to know which terms are negotiable and which terms are non negotiable 