Money market consists of the following instruments: 

1. Treasury Bills: 

a. Treasury bill is an instrument of short-term borrowing issued by the Reserve Bank of India on behalf of the Central Government to meet its short-term requirement. 

b. These are also known as Zero-Coupon Bonds. 

c. They are issued at a price lower than their face value. The difference between the face value and issue price constitutes discount that is nothing but the interest receivable on them. 

d. Treasury bills are negotiable instruments and are freely transferable. 

2. Commercial Paper: 

a. It is a short-term unsecured promissory note, negotiable and transferable by endorsement and delivery and with a fixed maturity period. 

b. Commercial papers are issued by large and creditworthy companies to raise short-term funds at lower rates of interest than market rates. 

c. The maturity period is usually between 15 days and one year. 

d. The actual purpose of CP was to provide short-term funds for seasonal and working capital needs. 

3. Call Money: 

a. It is short-term finance repayable on-demand with a maturity period of one day to fifteen days. 

b. Call-money us used for inter-bank transactions. Commercial banks have to maintain a minimum cash balance known as cash reserve ratio. The RBI changes this CRR which affects the amount of funds available with the commercial banks to be given as loans. So, the commercial banks raise short-term finance by this method. 

c. The interest rate paid on call money loan is known as call rate. This rate is very volatile and changes from day-to-day and even from hour-to-hour. 

4. Certificate of Deposit: 

• These are short-term, unsecured negotiable instruments in bearer form issued by commercial banks. 
• These are issued to individuals, corporations, and companies. 
• The certificate has the maturity date, the fixed rate of interest and the maturity value. 
• Generally, the maturity of the deposits is between three months and one year. 

5. Commercial Bill: 

• short-term negotiable and self-liquidating money market instruments. 
• They have comparatively very low risk. 
• The seller of the goods draws the bill and the buyer accepts it. On being accepted, the bill becomes a marketable instrument and is called a trade bill. When a trade bill is accepted by a commercial bank it is known as a commercial bill. 
• It is nothing but a bill of exchange used to finance the working capital requirements of business organisations.