Cp's and cd's
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
16 October 2012
What is the difference between Certificate of Deposits and Commercial Papers?
17 October 2012
• Certificates of deposit and commercial papers are both instruments used in the money market for different financial purposes.
• A certificate of deposit (CD) is a document issued by the bank to an investor who chooses to deposit his funds in the bank for a specific amount of time. Once the money has been deposited the depositor cannot withdraw the funds before maturity without incurring a penalty for early withdrawal.
• Commercial paper is used a substitute for a bank loan and is a short term money market instrument which matures within a period of 270 days.
• The main difference between the two forms of instruments is the time period of maturity of the two. While a CD is usually for a longer term, a promissory note is for a shorter period.
CDs are issued as a proof of an investment of funds in the bank by a depositor while commercial papers are issued to an investor as a proof of purchase of the issuer’s debt (purchasing debt means providing funds like a bank gives out a loan).
• Certificates of deposit and commercial papers are both instruments used in the money market for different financial purposes.
• A certificate of deposit (CD) is a document issued by the bank to an investor who chooses to deposit his funds in the bank for a specific amount of time. Once the money has been deposited the depositor cannot withdraw the funds before maturity without incurring a penalty for early withdrawal.
• Commercial paper is used a substitute for a bank loan and is a short term money market instrument which matures within a period of 270 days.
• The main difference between the two forms of instruments is the time period of maturity of the two. While a CD is usually for a longer term, a promissory note is for a shorter period.
CDs are issued as a proof of an investment of funds in the bank by a depositor while commercial papers are issued to an investor as a proof of purchase of the issuer’s debt (purchasing debt means providing funds like a bank gives out a loan).
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- About TDS & Income Tax
- Scrutiny and reopening of past returns
- Tax on Deemed Capital Gain
- Regarding ITR filing with more value than showing in AIS/TIS
- Type of Capital Gain
- Exiting partner in partnership firm in gst portal
- Booth for sales promotion
- F & O PROFIT REPORTING FOR AY 2026-27
- Rental income of jointly held property
- ITR-3 File/Error Found
- TDS on Rent received on redevelopment of building
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- Upload Level ValidationITR3Category of Defect B/D
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Taxation in the hands of Landowner under JDA
- Delisted shares sold in off market/ Rebate u/s87A
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
