Difference between Money Market and Capital Market

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Difference between Money Market and Capital Market

Difference between Money Market and Capital Market

Basis
Money market
Capital market
Meaning
The money market is the market in which short term securities such as treasury bills, certificate of deposits and commercial bills are traded
Capital market is the market in which long term financial instruments such as equities and bonds are raised and traded.
Maturity period
The maturity period of less than one year is accounted for.
The maturity period is more than one year.
Credit instruments
The credit instruments are short term in nature, such as treasury bills, commercial paper, certificate of deposit, etc
Its credit instruments are debentures , shares , government securities, etc.
Institution
The institution involved in the money market are central bank commercial banks, bill brokers, etc
The institution involved in it are stock exchange development banks, finance companies
Purpose of loan
It has the purpose of loan in short term in nature.
It has the purpose of loan in long term in nature.
risk
The degree of risk is small in it
The degree of risk is higher in it.
Relation with the central bank.
It is directly linked with the central bank
It has no close relationship with the central bank


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