Generally speaking, a short term medium notes is a note on the short term end of a medium term. To explain further, medium notes generally have terms of five to ten years. However, they can have terms up to fifty years or less than one year. Those with maturity terms of less than five years could be considered short term medium notes. The advantages of investing in these types of notes are numerous. It may take a little time, but with a little research you can determine if they are right for you.

So, what is the difference in these notes and plain short-term notes? One thing is that they are sold continuously, but they have all the features of corporate bonds. While bond offerings are typically only made every three to four years, medium ones are offered even weekly at times. Companies that sell these types of notes are usually considered to be of the highest quality. Another difference is that typically the coupon rate on a medium one will be higher, all other things being equal. Also, by knowing that the term is medium, investors have a better idea of how to compare rates when considering other fixed income securities. Each of these qualities give these notes an advantage over general short term notes.

A company may use short term medium notes in order to have a steady cash flow coming in from debt issuance. This is due to the fact that they are offered weekly, and have short maturities. Therefore, they are constantly turning over and producing cash flow. A company could also better plan debt issuance to meet financing needs using these types of notes. This would improve financial condition considerably in most situations. Another huge advantage is that medium ones allow a company to register with the SEC only one time, rather than registering with each issuance. This saves both time and money. All of these features work together to make short notes a wise option for many companies and investors.

Though all investment decisions are risky, a little research can help. With the right information, investing decisions can be made that balance the risks and the benefits. The goal is to get the maximum benefit possible with the least risk possible. It is truly a balancing act that takes education, wise counsel, patience, and knowledge. Investing in short term medium notes is one of those gems that great research and wise counsel can turn up.