Looking for a way to move large amount of money that’s safer than a personal check? Then check out Bank Drafts! This draft is a check that is drawn by a bank on its own funds in another bank.
To get a banker’s draft, a bank customer must have funds (or cash) available. The bank will then freeze the amount needed or move those funds into the bank’s accounts until the payment is completed.
The great thing about bank drafts are that they’re guaranteed by the bank as they are already “paid”. Check out our Bank Bonuses, Saving Rates and Credit Card Bonuses!
Basic Bank Drafts
- Large Amounts: Your cash is safe when you make bank drafts as a bank draft is a guaranteed form of payment that makes the payment much more likely to be successful and legitimate.
- Available Funds: Funds are typically available in the recipient’s account within one business day, which makes it popular for international trade or when purchasing a home. Compared to a cashier’s check, banks can guarantee bank drafts because the customer has already “paid.” while for cashier’s check it’s only guaranteed by the bank—after the bank receives money from the drawer.
Compared to Standard Checks
When a person write a check, they don’t necessarily need the fund available in their account to write it, which is why there are bounced checks. With Bank Drafts, you need the actual funds or cash to have it moved to the bank’s accounts immediately when the bank issues the draft.
Which mean they won’ be able to create a bank draft unless they actually have the money. Additionally, this form of payment is guaranteed by the bank as it’s already been “paid”, so it’s safer to receive a bank draft versus a check.
Are Bank Draft Payments Safe?
When someone is paying you with a bank draft, you cannot assume it is legitimate because scammers will use fake cashier’s checks. In cases where you receive a bank draft, be sure that you check with your bank and verify that the check is legitimate before spending any of the funds.
To deposit or cash a bank draft, the process is similar to any check. Head to your bank or credit union and endorse the back of the check. Your bank will then credit the funds to your account more quickly if you were to meet with a bank employee to deposit your bank draft. This is much quicker than depositing through an ATM or mobile device.
How to Make a Bank Draft
In order to get a bank draft, all you have to do is ask your bank or credit union. In the United States, you’ll generally get a cashier’s check, but in other countries they will use the term “bank draft”.
Although you can request drafts online, your best chances are if you go into a bank branch that you currently bank with. This is because they normally only provide this service to customers.
Away from home? If you aren’t at home or don’t have a bank account, then you can try to head to another bank and ask for a bank draft. However, there is a chance that they will come with some fees.
For example, you will need to pay the full amount of the check, including fees, with cash or a debit card cash advance. Alternatively, you can always do what you need to do with a money order, which is available in multiple grocery and convenience stores.
Credit union members. If you’re a member of a credit union, you may be ale to get an official check form another credit union’s branch. Many credit unions tend to do shared branching since they are a much smaller network in comparison to larger banks. Be sure to bring your ID with you and expect to pay a small fee.
Automatic Payments
Another term for bank drafts can also be automatic electronic payments. These payments allow businesses and service providers to transfer funds right out of a customer’s checking accounts. This process is to work around customers having to write a check or paying with a card.
These types of transfers tend to happen through the Automated Clearing House (ACH) network, which makes it easier for customers to set up recurring payments. Customers benefit because they don’t have to remember to write a check every payment period. Businesses benefit because they don’t have to physically deposit checks, wait for funds clear, or pay any fees for card payments.
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Bottom Line
For a highly secure form of payment, make sure to use a Bank Draft. To create a Bank Draft, you first must have the funds or cash available, the bank will then freeze the amount or move the amount needed until your payment is completed.
The great thing about bank drafts are that they are guaranteed by the bank as they have been paid already. Check out our Bank Bonuses, Saving Rates and Credit Card Bonuses!
