Business, Legal & Accounting Glossary
A bank draft is a written order in the form of a check instructing the payment of money from one bank account to another. The bank draft is drawn by one bank against funds that it has deposited in an account at a second bank. The first bank is giving its consent for the second bank to release funds or make payment to the individual named on the bank draft. A bank draft is usually more acceptable to a payee than a personal check. Other terms for bank draft are draft, bill of exchange, an order of payment, banker’s draft and a negotiable instrument. A bank draft is similar in form to the common bank check. Frequently, a bank draft is used to transfer funds and to settle outstanding balances between banks.
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This glossary post was last updated: 4th February, 2020 | 4 Views.