Meaning
A bank draft is a secure payment instrument, guaranteeing funds for the recipient.Definition
A bank draft is a type of payment order issued by a bank on behalf of a payer. The bank debits the payer’s account immediately and guarantees payment to the payee. It acts as a pre-paid check issued by the bank itself.How It Works
The payer requests a draft from their bank, pays the amount plus any fees, and the bank issues the draft. The recipient then deposits this draft into their own bank account for guaranteed funds.Key Features
It offers guaranteed payment, making it safer than personal checks, and cannot be stopped once issued.Author
