Keynes has identified three motives to hold money
Transaction Motive:
Consumers need money to meet their day to day needs,
producers need money to make investments.
Precautionary Motive:
To cover for unforeseen events such as sickness, accidents and losses, money is kept as precaution for contingency.
Speculative Motive:
For making gains from speculation on future value of bonds and securities.
Money may be demanded as a flow (transaction motive) as well as a stock (precautionary motive).
Money as a flow is that which is in circulation.
Total money supply at any point of time consists of money in circulation as well as in stock (in various forms of savings and deposits).