Money Market - Common Money Market Instruments

Common Money Market Instruments

• Certificate of deposit - Time deposit, commonly offered to consumers by banks, thrift institutions, and credit unions.
• Repurchase agreements - Short-term loans—normally for less than two weeks and frequently for one day—arranged by selling securities to an investor with an agreement to repurchase them at a fixed price on a fixed date.
• Commercial paper - Unsecured promissory notes with a fixed maturity of one to 270 days; usually sold at a discount from face value.
• Eurodollar deposit - Deposits made in U.S. dollars at a bank or bank branch located outside the United States.
• Federal agency short-term securities - (in the U.S.). Short-term securities issued by government sponsored enterprises such as the Farm Credit System, the Federal Home Loan Banks and the Federal National Mortgage Association.
• Federal funds - (in the U.S.). Interest-bearing deposits held by banks and other depository institutions at the Federal Reserve; these are immediately available funds that institutions borrow or lend, usually on an overnight basis. They are lent for the federal funds rate.
• Municipal notes - (in the U.S.). Short-term notes issued by municipalities in anticipation of tax receipts or other revenues.
• Treasury bills - Short-term debt obligations of a national government that are issued to mature in three to twelve months.
• Money funds - Pooled short maturity, high quality investments which buy money market securities on behalf of retail or institutional investors.
• Foreign Exchange Swaps - Exchanging a set of currencies in spot date and the reversal of the exchange of currencies at a predetermined time in the future.
• Short-lived mortgage- and asset-backed securities