Bank Draft

A type of check where the payment is guaranteed to be available by issuing bank. Typically, banks will review the bank draft requester's account to see if sufficient funds are available for the check to clear. Once it has been confirmed that sufficient funds are available, the bank effectively sets aside the funds from the person's account to be given out when the bank draft is used.

Bank drafts are normally involved in transactions involving large sums of money and/or situations where trust can be an issue.

Suppose you are purchasing a new car, showing up with a bank draft allows the dealership the assurance that you have enough money to purchase the vehicle and that your check will not bounce.


Investment dictionary. . 2012.

Look at other dictionaries:

  • bank draft — bank drafts N COUNT A bank draft is a cheque which you can buy from a bank in order to pay someone who is not willing to accept a personal cheque. Payments should be made by credit card or bank draft in U.S. dollars …   English dictionary

  • bank draft — also banker s draft n a cheque from one bank to another, especially a foreign bank, to pay a certain amount of money to a person or organization …   Dictionary of contemporary English

  • bank draft — n. a draft or bill of exchange drawn by a bank on another bank …   English World dictionary

  • bank draft — n. An order for payment of money drawn upon a bank by a bank officer, payable when the issuing bank accepts it. The Essential Law Dictionary. Sphinx Publishing, An imprint of Sourcebooks, Inc. Amy Hackney Blackwell. 2008 …   Law dictionary

  • bank draft — bank ,draft noun count an order to pay someone that is sent from one bank to another bank, usually in a different country …   Usage of the words and phrases in modern English

  • bank draft — noun a draft drawn by a bank against funds deposited in another bank • Syn: ↑banker s draft • Hypernyms: ↑draft, ↑bill of exchange, ↑order of payment * * * noun Etymology: bank ( …   Useful english dictionary

  • bank draft — a written instruction to a bank s agent to pay a sum of money to the person specified on the draft. A safe and convenient way of remitting money overseas. Glossary of Business Terms A draft addressed to a bank. Bloomberg Financial Dictionary * *… …   Financial and business terms

  • Bank draft — A draft addressed to a bank. The New York Times Financial Glossary * * * bank draft ˈbank draft also ˈbanker s draft noun [countable] BANKING a cheque written by a bank and therefore certain to be paid. A customer can use a bank draft to pay… …   Financial and business terms

  • bank draft — banker s cheque; = banker s draft A cheque drawn by a bank on itself or its agent. A person who owes money to another buys the draft from a bank for cash and hands it to the creditor who need have no fear that it might be dishonoured. A bank… …   Accounting dictionary

  • bank draft — banker s cheque; banker s draft A cheque drawn by a bank on itself or its agent. A person who owes money to another buys the draft from a bank for cash and hands it to the creditor who need have no fear that it might be dishonoured. A bank draft… …   Big dictionary of business and management

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