Commercial paper securities are short-term promissory notes issued
time to time by major corporations. They typically have maturities
from 30 to 270 days, and fairly high minimum amounts like $10,000.
The only asset securing these investments is the financial strength of
the issuing company. Historically, this has been quite good. Commercial paper may be purchased through broker/dealers and commercial banks. These are considered money market investments
because they are shorter-term, high quality securities. Most often,
commercial paper is purchased by money market mutual funds and
other lenders that are interested in short-term, liquid investments.
The interest and any gain on commercial paper are fully taxable.
