Types of Money Market Instruments
Types of Money Market Instruments
The following are the types of money market instruments that every investor must be aware
of before making a decision.
Treasury Bills
One of the safest money market instruments is Treasury Bills. This is a short-term borrowing
instrument that has been issued by the RBI for the Central Government NOTE STATE
GOVERNMENT cannot issue treasury bills. They are an ideal zero-risk instrument. However,
the returns may not be so attractive. It is accessible to both, the primary and the secondary
Market. Treasury Bills are essentially a promise to pay a certain determined amount after a
pre-determined time period. These bills are short-term securities and mature in a year or
less from their date of issue. Typically, they are issued with a maturity period that lasts for 3
months, 6 months and 1 year.