Savings deposits sit in M2 rather than M1 because they cannot directly serve as a:

1. The M1 and M2 boundary tracks spendability. 2. M1 includes checkable deposits, which one can easily use as a medium of exchange. 3. M2 includes savings deposits in banks. 4. Those are accounts on which you cannot write a check directly. 5. So they cannot directly serve as a medium of exchange, and fall outside M1. _Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 13 'Money and Banking'_