Rediscount

Rediscount can refer to either of two concepts in finance: discounting a debt instrument for a second time or a method of providing financing to a bank. Rediscount can refer to either of two concepts in finance: discounting a debt instrument for a second time or a method of providing financing to a bank. Rediscount is the act of discounting a short-term negotiable debt instrument for a second time. Banks may rediscount these short-term debt securities to assist the movement of a market that has a high demand for loans. When there is low liquidity in the market, banks can generate cash by rediscounting short-term securities.