Savings are now more liquid and part of “M1 money” : Regulation D has made savings deposits as convenient as currency

Money is marvelously nuanced. Because different assets can be used as money, we need several categories and definitions to keep track of it. M1 describes the most liquid and widely accepted assets used to easily settle transactions: currency, demand deposits, and highly liquid accounts.
A previous FRED blog post discussed how recent changes in the opportunity cost of money and the regulation of savings accounts have affected measures of the money stock (a.k.a. monetary aggregates). In this post, we tighten our focus on how these regulations have affected M1.
Before April 24, 2020, savings accounts were not part of M1. Limitations in the number of transfers from savings deposits made savings accounts less liquid than M1. M1 consisted of currency, demand deposits, and other highly liquid accounts called “other checkable deposits” (OCDs). An example of OCDs are the demand deposits at thrifts.
But the limitation on the number of these transfers was lifted

Federal Reserve Source

Author: RealEstate