What is Bank Draft??

Definition: A bank draft is a form of check that is issued and guaranteed by the bank. When asking for a draft check the issuing bank will usually check to ensure sufficient funds are available in your account. Once issued, the bank sets aside the money itself to guarantee it clears once cashed. Drafts are usually used in transactions involving larger sums of money for real estate, vehicle purchases, or other situations where the person or entity cashing the check wants a guarantee the funds are good.