What is the difference between Money Market and Capital Market?

Sir/Mam

What is the difference between Money Market and Capital Market?

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Hi,


Difference Between Money Market and Capital Market:

S.No	Money Market	Capital Market
1	The Money Markets are used for the raising of short term finance, sometimes for loans that are expected to be paid back as overnight.	Capital markets are used for the raising of long term finance, such as the purchase of shares, or for loans that are not expected to be fully paid back for at least a year.
2	Funds borrowed from the money markets are typically used for general operating expenses, to cover brief periods of illiquidity. For example a company may have inbound payments from customers that have not yet cleared, but may wish to immediately pay out cash for its payroll.	When a company borrows from the primary capital markets, often the purpose is to invest in additional physical capital goods, which will be used to help increase its income. It can take many months or years before the investment generates sufficient return to pay back its cost, and hence the finance is long term.

But together, money markets and capital markets form the financial markets.