- Money Market:
- Trades financial instruments with high liquidity.
- Maturities are very short, less than one year.
- Instruments are basically debt instruments.
- Examples: Treasury Bills, Commercial Paper, Certificate of Deposits.
- Capital Market:
- Trades debt and equity securities.
- Maturities are generally medium and long term, more than one year.
- Examples: Stocks, bonds.
| Feature | Money Market | Capital Market |
|---|---|---|
| Maturity | Less than one year (short-term) | More than one year (medium to long-term) |
| Liquidity | High liquidity | Lower liquidity compared to money market |
| Instruments | Debt instruments (e.g., T-bills, Commercial Paper) | Debt and equity securities (e.g., Stocks, Bonds) |
| Risk | Less risky | More risky |