Money Market vs Capital Market

Money Market is a key component of the financial system that deals with the short term lending and borrowing, typically very short periods. It is where the liquid assets are traded between banks, financial institutions and the government takes place.

Capital market is another key component that deals with long-term debt and equity investments. This is designed to channel the savings of individuals and institutions into long term productive use by government and organisations.

Feature	Money Market	Capital Market
Duration	Short term fund / duration	Long duration / long term
Location	No fixed place	Fixed place (Stock Exchange)
Participants	Not much notification	Public participation
Volume	High volume short duration	Regular produce / volume
Risk/Return	High liquidity; Not fixed produces	High risk; Returns unpredictable
Regulator	RBI Registered	SEBI Registered

(Source) - Organized Market: RBI, SEBI, Banks, Govt, NBFC - Unorganized Market: No regulation, money lenders, Nidhi funds