Suppose you transfer $500 from your savings account to your checking account. with this transaction, m1 decreases, and m2 stays the same.
A savings account is interest-bearing savings account at a bank or other financial institution. These accounts typically pay modest interest rates, but their security and reliability make them a great option for storing the cash you need for short-term needs.
There are some limits on frequency, but they are generally very flexible and ideal for building an emergency fund, saving for short-term goals like buying a car or vacation or simply saving excess cash. target. No need to sweep to your checking account so you can earn more interest.
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