Banknote Definition

A banknote is a somewhat antiquated term referring to any promissory note issued by a bank and payable on demand. Generally, they do not accrue interest and they are often acceptable as, or in fact are, cash. In the most general sense, all forms of paper money (e.g., dollar bills) are banknotes. A bank check drawn on secured funds and other more exotic financial instruments are other forms of banknotes.