(i) Short-term Funds: It is a market purely for short-term funds or financial assets called near money. 

(ii) Maturity Period: It deals with financial assets having a maturity period upto one year only. 

(iii) Conversion of Cash: It deals with only those assets which can be converted into cash readily without loss and with minimum transaction cost. 

(iv) No Formal Place: Generally, transactions take place through phone,

i.e., oral communication. Relevant documents and written communications can be exchanged subsequently. 

(v) Sub-markets: It is not a single homogeneous market. It comprises of several sub-markets ‘ each specialising in a particular type of financing. 

(vi) Role of Market: The components of a money market are the Central Bank, Commercial Banks. Commercial banks generally play a dominant role in this market. 

(vii) Highly Organized Banking System: The Commercial Banks are the nerve centre of the whole money market. They are the principal suppliers of short-term funds.

(viii) Existence of Secondary Market: There should be an active secondary market for these instruments. (be) 

Demand and Supply of Funds: There should be a large demand and supply of short-term funds. 

(ix) Wholesale Market: It is a wholesale market and the volume of funds or financial assets traded in the market is very large.

(xi) Flexibility: Due to greater flexibility in the regulatory framework, there are constant endeavours for introducing new instruments.

(xii) Presence of a Central Bank: The central bank keeps their cash reserves and provides them financial accommodation in difficulties by discounting their eligible securities.