The Federal Reserve quietly announced on December 17, 2020 that it is redefining the M1 and M2 Money Supply Measures (H.6 Release) by shifting the savings deposits component into M1 from M2. M1 is supposed to measure “demand money” – i.e. funds that can be accessed for use without prior notice, primarily checking account funds, including travelers checks and free-floating currency. M2 is M1 plus “term” deposits: savings accounts, CD’s in amounts of less than $100k and retail money market funds.
This chart below, sourced from Alasdair Macleod’s must-read “The Next Dollar Problem Has Just Arrived,”