Promissory Note

Written by True Tamplin, BSc, CEPF®

Reviewed by Editorial Team

Updated on February 27, 2023

Promissory Note: Definition

A promissory note is an instrument in writing (not a banknote or currency note) that contains an unconditional undertaking, signed by the maker, to pay a certain sum of money only to a certain person or entity.

Promissory Note: Explanation

A promissory note is an unconditional promise in writing made by one person to another, stating that they will pay a specific sum of money on demand or after a specific period or at a specific future date.

Specimen/Format of Promissory Note

Specimen/Format of Promissory Note

Features of Promissory Note

  • It must be in writing
  • It must be signed by the maker
  • It is a promise to pay
  • The promise to pay must be unconditional
  • The amount payable must be certain
  • The amount must be expressed in terms of money only
  • Acceptance is not required
  • It can be endorsed
Features of Promissory Note

Difference between Promissory Note and Bill of Exchange

Difference Between Promissory Note and Bill of Exchange

Promissory Note FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.