Money & Finance › The Fed, money supply & inflation › The money supply: M0, M1, M2 and M3
M1: cash and checking deposits (redefined 2020)
Redefined May 2020· Concept
Fact, law or dataA rule, statute, definition or measured number.
M1 is the narrow money supply: cash held by the public plus checking and, since 2020, savings deposits.
See it on the Money & Finance map →How it works
M1 counts money you can spend right away. In April 2020 the Fed dropped the six-withdrawals-a-month limit on savings accounts, making them as usable as checking, so from May 2020 it counted savings in M1. On paper, M1 jumped from about $4.8 trillion to $16 trillion in one month. It is now roughly $18–19 trillion, most of M2. Charts that do not mark the break show a spike that never really happened.
Why it matters
It tracks the most liquid money. The 2020 redefinition matters for anyone reading charts: the jump was an accounting change, not new money.
Facts, rules and data
The Fed announced the change in its H.6 release in December 2020, revising data from May 2020. The series is on FRED with the break visible.
Debates and risks
With M1 now close to M2 in size, some economists question whether the narrow measure still tells us much.
Connections (2)
▸M1: cash and checking deposits (redefined 2020) is a subset of M2: cash, checking, savings and money market fundsFact, law or data
The connection
M2 starts with M1, the money ready to spend, and adds near-money: small CDs and retail money market funds. Since savings deposits moved into M1 in 2020, M1 has made up most of M2, more than 80% in 2025.
When and why
Defined by the Federal Reserve; the current framework dates from 1980, plus the May 2020 savings change.
How we know
A definition, published in the Fed's H.6 release, which lists every component.
Debates and risks
With the two measures now overlapping so heavily, economists question whether separating them still adds useful information.
▸M1: cash and checking deposits (redefined 2020) is a narrow slice of The money supply: M0, M1, M2 and M3Fact, law or data
The connection
M1 is the most spendable slice of the money supply: currency in people's hands plus deposits they can spend at once. It leaves out bank reserves and less liquid holdings such as CDs and money market funds.
When and why
Fed data back to 1959; redefined in 1980 and again in May 2020.
How we know
The Fed's H.6 statistical release defines and reports it monthly.
Debates and risks
M1 guided Fed policy in the late 1970s and early 1980s; its unstable link to spending ended that, and its usefulness is still debated.