Commercial Paper

Short-term, unsecured, discounted notes issued by institutional borrowers and sold to investors for short term cash investment needs.

To help meet their immediate needs for cash, banks and corporations sometimes issue unsecured, short-term debt instruments known as commercial paper.

Commercial paper usually matures within a year and is an important part of what's known as the money market.

It can be a good place for investors - institutional investors in particular - to put their cash temporarily. That's because these investments are liquid and essentially risk-free, since they are typically issued by profitable, long-established, and highly regarded corporations.