Why does MONEY have 4 decimal places?

[Former Member]

I'm curious about why the MONEY and SMALLMONEY domains have 4 decimal places instead of 2, as I use for columns representing dollars and cents. Were 4 decimal places used to represent stock prices to the 16th of a dollar? Is there an ISO standard representation of currency? Is it because other countries represent monetary amounts with 4 decimal places? Or is there some other reason why I should use the built-in domains even though I don't track fractions of a cent.

[Former Member]

never made sense to me, so I never use it. All our clients are used to seeing money with 2 decimals. Having 4 causes a lot of extra function use (ROUND) to insure there aren't hidden fractions that make it look like the figures don't add up. I always considered "rates" to be "rates", not money so I also don't understand the logic.

[MCMartin]

Ever been at a gas station, they always count at least 3 decimal places. But to be serious the more decimal places you use, the more accurate will be your results. And for calculations involving money the highest accurracy is desired. Why 4 digits, seems to be just a trade-off decision between accuracy and storage requirements for historical reasons. Other major database systems (SQL Server and Oracle) use also 4 decimals for money data types.

Anyway, the official fixed EURO exchange rates have had up to 6 decimal places.