2. The term of commercial paper is less than 12 months. Because of its high risk, the interest rate is higher than the bank deposit rate in the same period, and commercial bills can be sold directly by enterprises or by dealers. However, the credit review of card-issuing enterprises is very strict. If it is a dealer's sale, it actually guarantees the commercial paper sold to investors behind the scenes, and commercial paper is sometimes sold at a discount.
Legal basis: People's Republic of China (PRC) Bill Law.
Article 72 A commercial bill is a bill issued by the drawer, which entrusts the drawee to unconditionally pay a certain amount to the payee or holder on a specified date.
Article 73 Commercial bills are divided into commercial acceptance bills and bank acceptance bills. Commercial acceptance bills are accepted by drawees other than banks. Bank acceptance bills are accepted by banks. The drawee of a commercial bill is the acceptor.
Article 74 When legal persons and other organizations open deposit accounts in banks, they must have a real trading relationship or a creditor-debtor relationship before they can use commercial bills.
Article 75 The drawer of a commercial acceptance bill is a legal person or other organization that opens a deposit account in a bank, has a real entrusted payment relationship with the payer, and has a reliable source of funds to pay the amount of the bill.