When you have to receive money from someone, you may get it in the form of a check. The check has your name on it and is given by the person from whom you owe money. You can deposit the check into your bank account and the money will be credited into your account. There is a risk involved in taking a personal check. It is possible that there is no money in the account of the person who has given you the check. In such a case, the check is refused by the bank.
A personal check given by someone can also be rejected by the bank if there is any problem in it, like signature mismatch or an error while writing the check. To avoid all these problems, some people insist on a check given by a bank. This is the bank draft. A bank draft, also known as a banker’s check, is a check that is issued by a bank. Since the bank issues the draft, there is no risk involved and you are sure to get the money in your account when you deposit it.
How to get a draft?
A bank draft is issued by the bank, where you have an account. All you need to do is visit the bank and request a bank draft. The bank would check your account and if you have sufficient funds, they would debit the money from your bank account and issue a draft. The draft can be issued in the name of any person or organization that you specify. The bank may charge you a fee for issuing the draft.
Some banks can issue a bank draft even if you do not have an account with them. You can deposit the cash for the amount for which you need the draft. Additional charges also have to be paid and the bank would issue a draft. To get a draft, you have to fill a form specifying in whose name you want the draft to be prepared.
Nowadays, banks make it convenient for customers to get a draft from their home. You need not even visit the bank; you can login to your bank account online. Once you login, you can order the draft online. All you need to do is specify the amount and the name of the receiver. The charges for issuing the draft would be displayed (no fees are charged from high-value customers). Once you confirm, the amount is debited from your account and the draft would be prepared and mailed to your home or office.
How the draft works?
Most individuals and organizations prefer the bank draft since the payment is backed by the bank. There is no chance of the draft being rejected, as long as you deposit it before the validity ends. Drafts are valid for three or six months and it needs to be deposited within this time. If you receive a bank draft, you can deposit it into your account. The money is transferred immediately (usually within 24 hours).
The bank draft is thus a safe and quick way of receiving money with no risks involved. If you lose a draft or it is damaged, you can get it cancelled. Even if the draft is not used, you can get it cancelled and get back your money.