Text b Kinds of Commercial Paper
There are numerous ways to classify the basic types of commercial paper. The UCC Classification Section 3-104 specifies four types of instruments – drafts, checks, notes and certificates of deposit.
Promissory note. A promissory note is defined as: “An unconditional promise in writing made by one person to another signed by the maker engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money to, or to the order of, a specified person or to bearer”.
Parties: maker and payee.
Promissory Note. A promissory note is an instrument by which the maker promises to pay a sum of money to another party (the payee).
$ 5,000.00_____________________________________ 2 January 19XX
Ninety (90) days __________________after date |__________promise to pay to the order of James J. Walsh
five thousand and no|100-------------------------------------------------- DOLLARS
At twelve and one-half percent (12.5%) per annum
Value received NO. 083153 Due _______________________ Karen M. Show
|
Check. A check is defined as:
"An unconditional order in writing addressed by one person to a banker, signed by the person giving it, requiring the banker to pay on demand a sum certain in money to, or to the order of, a specified person, or to bearer”.
£
22-18p Date 23-6-1983 To Smith & Co.
For Books
Amount
£22-18p.
|
30-90-44 Lloyd’s Bank 23 June 1983 Banstead Branch 38 High Street Banstead
Pay Smith and Co Ltd. Twenty two pounds and eighteen pence only J. Black J. Black
|
Draft. A draft is defined as unconditional written order by one party directing another to pay a sum certain in money on demand or at a definite time to order or bearer. Parties: drawer, drawee and payee.
Draft A draft is an instrument by which the party creating it, the drawer (Kathi Early in the example below) orders another party, the drawee (the bank) to pay money to a third party, the payee (Karen Shaw).
$ 5,000.00 January 2 19XX
Ninety (90) days after the above date PAY TO THE ORDER OF Karen Shaw
five thousand and no|100-------------------------------------------------- DOLLARS with exchange
value received and charge to account of
TO First National Bank of Chicago N Kathi Erley STOCK FORM 990-8 BANKFORMS. INC.
|
O.
02683
Chicago, Illinois
Kathi
Erley
Certificate of deposit. A certificate of deposit is defined as an instrument issued by a bank, which acknowledges receipt of money and states a promise to pay the certificate when it becomes due. Parties: maker (bank) and payee.
Certificate of Deposit. A certificate of deposit is an instrument by which a bank acknowledges receipt of money and promises to return it at a later date or on demand. Certificates of deposit may be negotiable or nonnegotiable, depending upon their terms.
NOTES:
hereof |
|
surrender |
|
hereinafter |
|
renew |
|
thereafter |
|
redeem |
|
per annum |
|
subject to |
|
subject |
|
not subject to check |
AUTOMATICALLY BANK OF HINSDALE 9010183 RENEWABLE 400 EAST OGDEN AVENUE. HINSDALE. ILLINOIS 60521 SUBSIDIARY OF LAKE SHORE BANCORP
January 2 19XX
Karen M. Shaw HAS DEPOSITED
five thousand and no|100_______________ DOLLARS $ 5, 000. 00
Payable to the Registered Holder hereof in current funds upon the surrender of this Certificate properly endorsed __________________ after date, or at any subsequent maturity date as herein after provided. It is understood and agreed that this Certificate shall be automtically renewed for an additional period of time equal to the original term hereof, dating from the first maturity date, and thereafter for similar periods of time equal to the original term, unless the Registered Holder hereof shall present this Certificate for payment at any maturity date, or 7 days thereafter, or unless the Bank shall prior to any maturity date, mail written notice to the Registered Holder, at the address appearing on the books of the Bank, of its decision to redeem this Certificate. Interest at the rate of ____________ % per annum shall be paid to the Registered Holder hereof ________________ but the rate of interest to be paid in future renewal periods shall be equal to the rate then in effect at this Bank for similarly issued certificate of deposit of like term and amount. This Certificate and the deposit which it evidences are subject to the rules and Regulations of any Governmental Agency responsible for supervising this Bank or regulating interest rates and the rules and Regulations of the Bank in force from time to time Current FDIC regulations require a substantial penalty if this deposit is withdrawn before maturity date.
ADDRESS One Oak Greek_ B uffalo Grove, IL 60089_ Kelly L. Buckweet social sec. no. 000-00-0000 BY: ______ DATE: _______
|
C
erificate
of Deposit