Jun 13, 2018

Is Bank Draft safe and secure option of payments?

A Bank Draft is traditionally a cheque drawn on bank’s fund received from Customer. In some cases, a Bank Draft is also called a “cashier’s cheque”. A Bank Draft is only issued to you, after you have paid the required amount from your account along with some fee to the Bank.
When you give a Bank Draft, the receiver has a better chance of being paid in a secured way.

Bank Drafts are paid in advance:
1. Bank Drafts are used when you want to pay guaranteed funds to the payee. For instance, while paying your college fees, School admission, booking property, etc., you might need to give a Bank Draft instead of a personal cheque.
2. This term is also used in bill payments. When we use this term for paying bills, it means that an electronic transfer has been made from the payer’s account to that of the payee.
3. Bank Drafts are also used in international trade transactions.

A Safer Option in dealings:
Bank Drafts are assumed to a safer and secure option by sellers as the amount is guaranteed by the draft issuing bank. In case of a personal cheque, it might or might not get bounced. But a Bank Draft won’t get bounced (unless there is an exceptional or technical case).

Let us understand, how safe is Bank Draft?
Even though Bank Drafts are safer than personal cheques, you cannot always assume that you will get your payment through these. There are some of the exceptional cases, under which you may not get any payment through a Bank Draft.

1. If the draft is not issued by the bank, i.e. the draft is fraudulent.
2. The issuing bank is not legible to pay any outstanding drafts, if in case it goes bankrupt.
3. Stale Bank Draft presented for Clearing.
4. Wrongly presented in General Clearing even though it’s specially crossed to a particular Bank.

Bank Drafts are a convenient, safe and secure option of payments.

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