What is a 'Money Market'
A money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities
are traded. The money market is used by participants as a means for
borrowing and lending in the short term, from several days to just under
a year. Money market securities consist of negotiable certificates of deposit (CDs), bankers acceptances, U.S. Treasury bills, commercial paper, municipal notes, federal funds and repurchase agreements (repos).
Some more information:
BREAKING DOWN 'Money Market'
The money market is used by a wide array of participants, from a company raising money by selling commercial paper into the market to an investor purchasing CDs as a safe place to park money in the short term.
The money market is typically seen as a safe place to put money due the
highly liquid nature of the securities and short maturities, but there
are risks in the market that any investor needs to be aware of including
the risk of default on securities such as commercial paper.
The money market is different from the capital market.