Bankers Acceptances

A Banker’s Acceptance is a bill of exchange drawn on and accepted by a bank. The drawer of the bill is usually a company seeking financing from the bank to meet their working capital needs. These companies usually have strong credit ratings which supports this instrument’s ability to be traded in the secondary market. Usually, investments in Bankers Acceptances earn clients more interest than in Treasury Bills, as Bankers Acceptances are considered to be riskier.