Short term bonds are a type of bond fund. A bond fund is an investment that involves purchasing a debt security. A periodic dividend is earned based on the interest payments made on the debt. The interest rates tend to be higher than that of CDs or money market accounts. Short term bonds mature in less time. This type of short term paper is popular when the market is struggling, and it can be risky. Bonds can drop in value if interest rates on debt securities are reduced.
Short Term Commercial Paper Definition