How does commercial paper works ..........is there any minimum investment criteria for Individuals?

Answer 1

this question is very vague - commercial papers is a massive topic - please be more specific in questioning

Answer 2

Commercial paper is a variety of instruments from banker's acceptances (which are post dated checks guaranteed by a bank) to short term subordinated debentures. All of them are very short term IOUs by companies. Anyone can buy some types of commercial paper through e-trade by doing a short term bond search and buying short term bonds and paper. The problem at the shortest end, for individuals, is that the yield is lower than available elsewhere. The minimum investment, practically speaking, is $10,000 due to commission costs. However, if you only have $10,000 I would suggest opening a GMAC insured savings account which allows checks and pays much better. You really need to scale up to around $25,000 per purchase for there to be negligible effects.

Most regular commercial paper is not available through e-trade as it is often in units of $100,000 or more, or a specific check for a specific shipment written in amounts equal to the trade agreement.