Definitions of the U.S. Money Supply

In the United States, the money supply has several definitions.

M1 = currency[1] + travelers checks[2] + demand deposits[3] and other checkable deposits[4],[5]


A traveler’s check is a draft, available in various denominations, that must be signed at the time of purchase and which can be redeemed only when countersigned with a matching signature at the time of redemption.

A demand deposit is the balance in a checking account at a commercial bank. Depositors may withdraw these funds on demand using a check or debit card.

M2 = everything in M1 + savings accounts + money market accounts + money market mutual funds + small denomination certificates of deposit

M3 = everything in M2 + large denomination certificates of deposit



U.S. Money Stock Measures


Table 1. Money Stock Measures.

Totals for the week ending
March 14, 2005
(in billions of dollars)
Currency[1]
703.2
Travelers checks[2]
7.5
Demand deposits[3]
320.8
Other checkable deposits at commercial banks[4]
182.2
Other checkable deposits at thrift institutions[5]
137.4
M1
1,351.1
M2
6,407.5
M3
9,477.4
Source: Federal Reserve System (http://www.federalreserve.gov/releases/H6/Current/)