DIFFERENCE BETWEEN MONEY MARKET AND CAPITAL MARKET

Financial market is divided in to two markets. One is known as CAPITAL MARKET and another is MONEY MARKET. Capital market is also known as STOCK MARKET. Securities with longer life are traded in this market. Financial assets basically traded in this market provide long term financial assistance to business entity.

               

            On the other hand financial assets are traded in the money market provides short-term financial assistance to business entity. In other words it provides short-term capital to business entity. This type of market supplies funds for working capital requirement.

There have some basic difference between this type of market.

MONEY MARKET	CAPITAL MARKIT
In money market there is no such primary market and secondary market.	Capital market is divided into primary market & secondary market.
It provides short-type funds	It provides long term funds.
Money market participants are banks , financial institutions, RBI, Govt.	Capital market participants are retail investor, institutional investor, corporate, banks.
Money markets instruments include interbank call money. Notice money upto 14 days , commercial paper , 91 days treasury bills.	Capital market instruments are share and debt instrument.
It is less risky because of short duration.	Risk is higher.
There is no formal market place	Transaction is at a formal place i.e. stock exchange.
Closely and directly linked with the central bank(RBI)	Closely and directly linked with the SEBI.

From the above discussion it is clear that both the market has great influence on the economic growth. They fulfill different needs of the industry with various financial products.