| Money Market | Capital Market |
|---|---|
| Money market is the place where short term marketable securities are traded. | Capital Market, where long term securities are traded is known as Capital Market. |
| Treasury bills, commercial papers, certificate of deposits, trade credit are the instrument of money market. | Share, debentures, bonds, retained earnings are the instrument of capital market. |
| The money market instruments are rich in liquidity. | The instruments of the capital market are not that much liquid. |
| Money Market instruments gives lower returns as compared to capital market instruments. | Capital market instruments gives higher returns as compared to money market instruments. |
| The instrument traded in money market carry low risk. | The capital market instruments carry high risk. |
| Money Market is unsystematic market and so the trading is done off exchange, i.e. Over The Counter (OTC) between two parties by using phones, email, fax, online, etc. | It is broadly divided into two major categories: Primary Market and Secondary Market. |
| Redemption of money market instruments is done with in a year. | Capital market instruments have a life of more than a year. |
| Money Market in India is regulated by Reserve Bank of India. | Capital Market in India is regulated by Securities Exchange Board of India. |
