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Functional definition of money. It is defined in terms of its functions. Accordingly money is that which money does. It is based on the four functions of money already discussed. Broadly anything which is generally accepted in payment of debt and as payment of goods and services should be included in money supply. Alternatively if a good is generally acceptable in payment and generally used as medium of payments, it should be treated as money no matter what its legal status is.

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The legal tender status given by the government to money may be limited or unlimited.
i) Limited legal tender. It is that money which no person can be forced to accept beyond a certain maximum limit fixed by law. For instance in India, coins are limited legal tender because coins of 5, 10, 20 and 25 paise can be accepted up to maximum sum of र 1000 as per Coinage bill passed on 11th Aug. 2011. One can refuse payments by an individual in these small coins beyond this limit.
(ii) Unlimited legal tender. It is the money which a person has to accept up to any limit. There is no limit to quantity of money offered in payment. For example in India, paper notes are unlimited legal tender because all currency notes can be used to settle payments of unlimited value.
Note: that currency notes of denomination of र 2 and above are issued by RBI whereas one Rupee note and coins are issued by Ministry of Finance - Government of India.

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Narrow and broad definitions of money. H.G. Johnson has classified definition of money into narrow definition and broad definition.
1.    Narrow definition of money (M = C + DD). It is based on ‘medium of payment’ function only. It is narrow definition of money when money is identified with medium of payment function only and its other functions are overlooked. Thus anything which is used as medium of payment is included in narrow definition of money (M). Accordingly it includes currency (C) and demand deposits (DD). Thus M = C + DD (this is also known as traditional approach to constituents of money supply).
2.    Broad definition of money (M = C + DD + TD + SD). It is broad definition of money when scope of money is extended to include ‘store of value’ function in addition to medium of exchange function. These have a high degree of moneyness or liquidity and are widely used as store of value. In addition to currency and demand deposits, (i.e. narrow money), items like ‘time deposits (TD) and savings deposits (SD) at banks and post offices’ are also included in broad money because such financial assets have a high degree of moneyness or liquidity which can be converted in to demand deposits/cheques on a short notice. Thus M = C + DD + TD + SD (this is also known as Modern Approach to constituents of money supply).

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Credit Money. Credit money refers to money whose value as money (i.e. face value) is greater than intrinsic value (i.e. the commodity value of the material from which the money is made). For example, face value of a hundred rupee note is र 100 but its intrinsic value is value of paper of which it is made. Similarly token coins, currency-notes, cheques, etc. are other examples. Since it is made of cheap metal or paper, its official purchasing power is higher than the value of metal or paper content. In day-to-day language, bank money is called credit money which refers to bank deposits of the people and which are payable on demand through cheque, bank drafts, etc. A cheque is a written order to a bank to pay the stated sum from the drawer's account. Credit money is classified as fiat money and fiduciary money.

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Standard and Token Coins. Standard coins refer to those coins whose face (printed) value is equal to its intrinsic value. Intrinsic value refers to the value of the metal the coin is made of and face value refers to the value marked on the face of the coin. For example, if value of the metal used in a five rupee coin is equal to five rupees, it will be called a standard coin and recognised as full-bodied money. It is also called commodity value of money.
Full-bodied money is the money whose value as a commodity (of which it is made of) for non-monetary purposes is as great as its value as money.
Token coins (or token money) refers to money whose face value is much greater than its intrinsic value. All Indian coins like those of र 5, र 2, र 1, etc. are token coins since their value as money is far above the value of metal contained in the coins. Likewise money value of a five hundred rupee note is token money. These are made of inferior metals like nickel, copper, aluminium, etc. Thus token coins are economical as they cost less than their market value. Token money is also called money value of money.