Distinction between capital market and money market is as follows. 

(i) Participants:- The participants in the capital market are financial institutions, banks, corporate, entities, foreign investors and ordinary retail investors from members of the public. Participation in the money market is by and large undertaken by institutional participants such as the RBI, banks, financial institutions and finance companies. 

(ii) Instruments:-  The main instruments traded in the capital market are equity shares, debentures, bonds, preference shares, etc. The main instruments traded in the money market are short term debt instruments such as T-Bills, trade bills, reposts, commercial paper and certificates of deposit. 

(iii) Investment outlay:- Investment in the capital market, i.e., securities does not necessarily require a hug financial outlay. The value of units of securities is generally low. This helps individuals with small savings to subscribe to these securities. In the money market, transactions entail huge sums of money as the instruments are quite expensive. 

(iv) Duration:- The capital market deals in medium and long-term securities such as equity shares and debentures. Money market instruments have a maximum tenure of one year, and may even be issued for a single day. 

(v) Liquidity:- Capital market securities are considered liquid investments because they are marketable on the stock exchanges. However, a share may not easily find a buyer. Money market instruments on the other hand, enjoy a higher degree of liquidity as there is a formal arrangement for this. The Discount Finance House of India (DFHI) has been established for the specific objective of providing a ready market for money market instruments.