Commercial Papers are Financial Instruments which is borrowed by Large Companies ( eg: Tata Motors, Reliance Industries, L&T, BHEL, SBI, etc…) were the Tenure of Borrowing Money is more than 7 Days or Less Than 1 Year.
The Borrowed Money is Used by the Companies for Managing there day to day Activities like Payroll, or New Company Acquisition, etc…
Why do Corporates Borrow money through Commercial Papers?
Corporates Borrow money because the Interest Rate in Commercial Papers are less than Banks Loan Rates. As the money is directly borrowed from public. And only Reputed Organization which good Financial Status can Borrow money through commercial Paper and Save Interest Costs.
Rating Agencies
Commercial Papers are rated by Rating Agencies like CRISIL, FITCH, ICRA, etc….
Only good rated Commercial Papers are Allowed to Borrow money from the Public.
Thank you for Showing Interest in Saving Tax. Our Advisor will get back to you shortly.
YOU MAY ALSO LIKE
Debt Funds v/s Fixed Deposits. Which is Better? A traditional and popular investment option for Indian households is a fixed deposit in a bank. Most investors use bank fixed deposits for regular income and for achieving their financial goals. However, the interest rates on the deposits are falling and investors are looking for alternate options like debt funds. Here is…Read More
Which is Better ELSS or PPF? Savings form an important part of our life. It is important that you not only save but also invest the savings into the right products. It is essential to have knowledge of different products when making an investment decision. Equity Linked Savings Scheme (ELSS) and Public Provident Fund (PPF) are two products, which are…Read More
What is Value Investing? Before you invest your money in a value fund, it is important to understand how it works. Value funds follow the strategy of value investing to generate high returns on the investment. This form of investment chooses stocks that are trading at a discount as compared to its intrinsic value (Book Value). The key to value…Read More
