Money Market is the market where short term monetary assets are bought & sold. The main components of money market are the financial institution & the financial instruments.
Instruments of Money market are as follows:
Call Money: The Call Market enables the financial institutions to even out their short term (day to day) deficit and surplus of money by call money. Call Money is the amount lent and borrowed on demand. It is an inter bank market.
Treasury Bills: Treasury bills are low risk category short term instruments which are issued for a fixed amount at a prefixed day. There are four types of treasury bills available i.e. 14 days T-bill, 91 days T-bill, 182 days T-bill, 364 days T-bill.
Commercial Papers: Commercial Papers are negotiable short term promissory notes issued by reputed organizations with fixed maturity period. These organizations issue commercial papers either directly or through banks, generally on discount basis.
Commercial Bills: The trade bills which are accepted by the commercial banks, called as commercial bills.
Certificates of Deposits: Certificates of Deposit (CD) is a secure, short term negotiable promissory note. Maturity of CDs is a year. It is issued on the discount to the face value.
Government Securities: Securities issued by government of India or state government are called as government securities. These securities are issued as fixed interest securities, floating rate securities and zero coupon instruments.