Measure	Component	Description
M1	Currency held outside banks.	Notes issued by the FED.
		Coins issued by the U. S. Treasury.
	Demand deposits.	Checkable deposit convertible into currency on demand.
	Traveler’s checks.	A bank check convertible into currency on demand.
	Other checkable deposits.	Negotiable Order of Withdraw (NOW) Accounts. (The official name of a checking account.)
		Automatic transfer savings account. A checkable deposit the balance on which is maintained at an agreed level by transferring funds from a savings account. Used by commercial banks, S&L’s, and credit unions.
	Note: These accounts are used primarily as a medium of exchange...i.e. for transactions.
M2	M1	See previous page.
	Savings deposits.	A deposit that technically can not be withdrawn on demand, but in practice can be instantly withdrawn.
	Small time deposits.	A deposit with a fixed term to maturity.  (Example: a certificate of deposit.) Deposits of $100,000 or less are considered to be small.
	Eurodollar deposits.	U. S. dollar accounts in banks in other countries.
	Money market mutual funds held by individuals.	A financial intermediary that obtains funds by issuing shares on which checks may be drawn.
	Money market deposit accounts.	Liquid savings accounts paying moneymarket interest rates.
	Overnight repurchase agreements.
	Overnight eurodollars.
	Note:  A broader measure.  The money in the non-M1component is used primarily as a store of value.  These funds can be     transferred to a transaction account.
M3	M2	See previous description.
	Large time deposits.	A deposit with a fixed term to maturity.  (Example:  Certificate of deposit.)  Deposits of $100,000 or more are considered to be large.
	Eurodollar time deposits.	U. S. dollar accounts in banks inother countries, mainly in Europe,that have a fixed term to warranty.
	Money market mutual fund shares held by institutions.	Example:  Money market fund held by large insurance companies.
	Term repurchase agreements.	Repurchase agreements other than overnight agreements.
	Note:  This is the largest measure of money.  It is generally used by large business and financial institutions.
L	M3	See previous description.
	Non-bank public holdings of U. S. savings banks.
	Short term treasury securities.	Treasury bills (less than one year maturity – issued in denominations of$10,000 to $1,000,000.
	Commercial paper.	Short term debt instruments offeredby large corporations.
	Bankers Acceptances.  (Less money market fund holdings of these assets.)
	Note:  L has not served as a target for monetary policy, in part because data are not available a month later than data  on  the M’s, and also because  its components are less  influenced by Federal Reserve policy.