bank draft

  

Definition

Bill of exchange drawn by a bank on itself, or on a correspondent bank in another city or country. Bank drafts are commonly used by banks in dealings with other banks, or when a creditor or seller is unwilling to accept an ordinary check from a debtor or buyer in another city or country. (In local transactions a certified check or a cashier's check serves the same purpose.) When a customer (the drawer) requests a draft, the bank withdraws the amount of the draft from his or her account and holds it to honor the draft on its presentment by the drawee. Because, in normal circumstances, a draft is certain to be paid, it is generally accepted as a cash equivalent. Also called banker's draft.

Use bank draft in a sentence

  • The bank draft was issued and we were then able to move forward in the process of finalizing the new deal.

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  • If two banks are making a deal between each other instead of exchanging cash it is easier to use a bank draft.

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  • I have never done a bank draft before, so I made sure to call my bank and ask them how it all worked.

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