Commercial Paper (Investments & Retirement) - Definition, Examples, Advice | Bolder Money

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Product 1:1 Coaching Our Coaches Our Story

Product 1:1 Coaching Our Coaches Our Story

Definition

Short-term unsecured debt issued by companies to meet immediate financing needs, usually maturing in less than a year.

What to consider

Recognize this as a short-term debt instrument used by companies.
Consider the credit risk associated with the issuer.
Compare yields with other short-term investments for best results.

Real world scenarios

To cover short-term operating costs, the company issued commercial paper, taking advantage of lower interest rates available for short-term debt.

Related terms

Investments & Retirement

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