Bill Of Exchange

AAA

DEFINITION of 'Bill Of Exchange'

A non-interest-bearing written order used primarily in international trade that binds one party to pay a fixed sum of money to another party at a predetermined future date.

INVESTOPEDIA EXPLAINS 'Bill Of Exchange'

Bills of exchange are similar to checks and promissory notes. They can be drawn by individuals or banks and are generally transferable by endorsements. The difference between a promissory note and a bill of exchange is that this product is transferable and can bind one party to pay a third party that was not involved in its creation. If these bills are issued by a bank, they can be referred to as bank drafts. If they are issued by individuals, they can be referred to as trade drafts.

VIDEO

Loading the player...
RELATED TERMS
  1. Promissory Note

    A financial instrument that contains a written promise by one ...
  2. Discount House

    Primarily operating in the United Kingdom, a firm that buys, ...
  3. Check

    A written, dated and signed instrument that contains an unconditional ...
  4. At Sight

    A payment due on demand. An at sight payment will require the ...
  5. Sum Certain

    A legal description of the predetermined settlement price for ...
  6. Agricultural Credit

    Any of several credit vehicles used to finance agricultural transactions, ...
RELATED FAQS
  1. What is the difference between a bill of exchange and a promissory note?

    A bill of exchange is a written agreement between two parties – the buyer and the seller – used primarily in international ... Read Full Answer >>
  2. Where on the Internet can I find free sample templates for a bill of exchange?

    A number of different websites offer free templates to help an individual or business generate a bill of exchange. A bill ... Read Full Answer >>
  3. What is the difference between a bill of exchange and a bill of lading?

    A bill of exchange is a documentation of payment, much like a promissory note. On the other hand, a bill of lading is a receipt ... Read Full Answer >>
  4. Who uses bills of exchange?

    Bills of exchange primarily act as promissory notes in international trade; the seller, or exporter, in the transaction addresses ... Read Full Answer >>
  5. What are some causes of structural unemployment?

    Structural unemployment is a form of unemployment caused by shifts in the economy. It occurs when there is an oversupply ... Read Full Answer >>
  6. How can companies reduce internal and external business risk?

    A company can reduce negative exposure to business risk by identifying internal risks and external risks. Internal risks ... Read Full Answer >>
Related Articles
  1. Investing

    Bill of Exchange

    A bill of exchange is a document used in international trade to pay for goods or services. It is signed by the person promising to pay, and given to the person entitled to receive the money. ...
  2. Personal Finance

    What Is International Trade?

    Everyone's talking about globalization, so we explain what is it and why some oppose it.
  3. Investing Basics

    Explaining Fixed Income

    A person living off a fixed income is usually a retiree receiving a fixed, steady monthly inflow of cash.
  4. Economics

    What is Productivity?

    Productivity is an economic term describing the relationship between outputs as compared to inputs needed to produce those outputs.
  5. Mutual Funds & ETFs

    Is the DSUM Yuan Fixed Income ETF a Good Bet?

    An an depth look at PowerShares Chinese Yuan Dim Sum Bond ETF and its risks.
  6. Economics

    Who Produces The World's Food

    We look at the top producers of the world's food basket.
  7. Trading Strategies

    Top 3 High Yield Stocks with Growth Potential

    High yield and growth potential don't often go hand in hand, except when it comes to these three stocks.
  8. Mutual Funds & ETFs

    Top Foreign Debt ETFs & Funds for Diversification

    Foreign fixed income options for investors seeking capital preservation and diversification
  9. Economics

    The 5 Industries Driving the U.S Economy

    Jobs are being created by the millions, wage growth is picking up and foreign trade is only 30% of the nation’s GDP.
  10. Economics

    How the UK Makes Money

    The United Kingdom has one of the strongest economies in the world thanks to the strength of its services, manufacturing and tourism sectors.

You May Also Like

Hot Definitions
  1. Capital Stock

    The common and preferred stock a company is authorized to issue, according to their corporate charter. Capital stock represents ...
  2. Unearned Revenue

    When an individual or company receives money for a service or product that has yet to be fulfilled. Unearned revenue can ...
  3. Trailing Twelve Months - TTM

    The timeframe of the past 12 months used for reporting financial figures. A company's trailing 12 months is a representation ...
  4. Subordinated Debt

    A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known ...
  5. International Financial Reporting Standards - IFRS

    A set of international accounting standards stating how particular types of transactions and other events should be reported ...
  6. Geometric Mean

    The average of a set of products, the calculation of which is commonly used to determine the performance results of an investment ...
Trading Center