Transactions Motive

The transactions motive is one of three reasons, set out by John Maynard Keynes in his 1936 General Theory, why people and firms hold money instead of putting it into interest-bearing assets: to pay for everyday purchases and bills. The three motives together make up the demand for money in liquidity preference theory, which is explained in full on that page.

The other two motives are the precautionary motive, speculative motive. The idea is central to Keynesian economics.