Difference between numeric, float and decimal in SQL Server

What are the differences between numeric, float and decimal datatypes and which should be used in which situations?

For any kind of financial transaction (e.g. for salary field), which one is preferred and why?

use the float or real data types only if the precision provided by decimal (up to 38 digits) is insufficient

• Approximate numeric data types(see table 3.3) do not store the exact values specified for many numbers; they store an extremely close approximation of the value. (Technet)

• Avoid using float or real columns in WHERE clause search conditions, especially the = and <> operators. It is best to limit float and real columns to > or < comparisons. (Technet)

so generally choosing Decimal as your data type is the best bet if

• your number can fit in it. Decimal precision is 10E38[~ 38 digits]
• smaller storage space (and maybe calculation speed) of Float is not important for you
• exact numeric behavior is required, such as in financial applications, in operations involving rounding, or in equality checks. (Technet)

1. Exact Numeric Data Types decimal and numeric - MSDN

• numeric = decimal (5 to 17 bytes)
  • will map to Decimal in .NET
  • both have (18, 0) as default (precision,scale) parameters in SQL server
  • scale = maximum number of decimal digits that can be stored to the right of the decimal point.
  • money(8 byte) and smallmoney(4 byte) are also Exact Data Type and will map to Decimal in .NET and have 4 decimal points (MSDN)

2. Approximate Numeric Data Types float and real - MSDN

• real (4 byte)
  • will map to Single in .NET
  • The ISO synonym for real is float(24)
• float (8 byte)
  • will map to Double in .NET

• All exact numeric types always produce the same result, regardless of which kind of processor architecture is being used or the magnitude of the numbers
• The parameter supplied to the float data type defines the number of bits that are used to store the mantissa of the floating point number.
• Approximate Numeric Data Type usually uses less storage and have better speed (up to 20x) and you should also consider when they got converted in .NET
• What is the difference between Decimal, Float and Double in C#
• Decimal vs Double Speed
• SQL Server - .NET Data Type Mappings (From MSDN)

main source : MCTS Self-Paced Training Kit (Exam 70-433): Microsoft® SQL Server® 2008 Database Development - Chapter 3 - Tables, Data Types, and Declarative Data Integrity Lesson 1 - Choosing Data Types (Guidelines) - Page 93