Validating a bankers draft
Of course, there are consequences for passing bad checks, but checks bounce all the time.Sometimes it’s an honest mistake, and nobody’s trying to defraud anybody—it’s easy to forget about other transactions that drain an account.To get a banker’s draft, a bank customer must have funds (or cash) available.The bank will freeze the amount needed or move those funds into the bank’s accounts until the payment is completed.Available funds: Standard checks can take several business days to move through the banking system.
Similar to a cashier’s check, a bank draft is safer than a personal check when accepting large payments.
There’s no way for them to spend that money before you deposit the bank draft—because the bank already took the money out of their account.
Instead of relying on everybody who writes a check, you can depend on the bank to back up the payment.
The term bank draft is used for other situations, and use varies from country to country.
For example, electronic bill payments that move funds directly from a bank account to a service provider (such as an electric utility provider or an online merchant) are also called drafts.