Money Market

On the basis of maturity:

1. Call Money or overnight money: lending or borrowing is done for on an overnight basis, i.e a
day.

2. Notice Money: time period between 1-14 days (i.e. 2-13 days)
3. Term Money: time period between 14-365 days (i.e. 15-364 days)

Certificate of deposit

It is a negotiable unsecured (without any collateral) money market instrument. It is

issued in a dematerialized (electronic) form or as a Usance Promissory Note against
funds deposited at a bank or other eligible financial institution for a specified time
period.

Commercial Bills/Bills of exchange

These bills, unlike the T-Bills, are issued by financial institutions, firms, or businesses in
exchange for goods sold or purchased.
 Bill of exchange: According to the Negotiable Instruments Act 1881, a bill of
exchange is defined as an instrument in writing containing an
unconditional order (Note, that in case of a promissory note there was an
unconditional promise but here there is an unconditional order because here the
person who has given money is ordering the person to whom money is given to
return his money at a specified date), signed by the maker (creditor), directing a
certain person to pay a certain sum of money only to, or to the order of a
certain person
 Types: On-demand & Usance