bank draft

noun
Updated on: 13 Oct 2017

Definition of bank draft

:a check from one bank to another bank for payment in the name of a particular person or organization

Word by Word Definitions

bank play
  1. : a mound, pile, or ridge raised above the surrounding level: such as

  2. : a piled-up mass of cloud or fog

  3. : an undersea elevation rising especially from the continental shelf

  1. : to build a raised border of earth around : to raise a bank (see 1bank 2) about

  2. : to restrict the flow of air to (a fire) especially by piling ash around or over the burning embers

  3. : to build (a curve) with the roadbed or track inclined laterally upward from the inside edge

  1. : an establishment for the custody, loan, exchange, or issue of money, for the extension of credit, and for facilitating the transmission of funds

  2. : the table, counter, or place of business of a money changer

  3. : a person conducting a gambling house or game

  1. : to manage a bank

  2. : to deposit money or have an account in a bank (see 3bank 1a)

  3. : to deposit or store in a bank

  1. : a group or series of objects arranged together in a row or a tier : such as

  2. : a set of elevators

  3. : a row or tier of telephones

draft play
  1. : the act of drawing or pulling in a net

  2. : haul

  3. : the act or an instance of drinking or inhaling

  1. : used or adapted for drawing loads

  2. : being or having been ready to be drawn from a receptacle : being or having been on draft

  1. : to select for some purpose: such as

  2. : to conscript for military service

  3. : to select (a professional athlete) by draft


Financial Definition of BANK DRAFT

bank draft

What It Is

A bank draft is a check that a bank guarantees.

How It Works

Bank drafts are not common in the United States; they are more popular in Britain. The concept is similar to that of a cashier's check.

To obtain a bank draft, a person must first deposit funds equal to the check amount with the issuing bank. The bank then generates a check to the payee drawn on the bank's own account. The name of the remitter (the person purchasing the check) is noted on the check, but the bank itself is the entity making the payment. The check is signed by a bank cashier or officer.

Banks typically charge a fee for bank drafts.

Why It Matters

A bank draft guarantees the availability of the underlying funds because it is drawn upon and issued by a bank. In other words, bank drafts can't bounce, which is why some people choose to make or require payments with bank drafts (or in the U.S., cashier's checks).

Some critics note that bank drafts can be forged, and thus some advise to never accept a bank draft or cashier's check on Friday evenings or weekends, when banks are closed and the scam can't be discovered for several days.



Seen and Heard

What made you want to look up bank draft? Please tell us where you read or heard it (including the quote, if possible).

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!

WORD OF THE DAY

to buzz or drone

Get Word of the Day daily email!

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!