M1

M1 is the money supply that is composed of physical currency and coin, demand deposits, travelers’ checks, other checkable deposits, and negotiable order of withdrawal (NOW) accounts. M1 includes the most liquid portions of the money supply because it contains currency and assets that either are or can be quickly converted to, cash. However, near money and near, near money, which fall under M2 and M3, cannot be converted to currency as quickly.