How does a bank draft differ from an ordinary check?

Answer 1

A bank draft is a payment instrument issued by a bank that guarantees payment to the payee, as the funds are drawn directly from the bank's own account rather than the account holder's. In contrast, an ordinary check is a payment order from a bank account holder directing their bank to pay a specified amount from their own account. Because bank drafts are guaranteed by the issuing bank, they are generally considered more secure and reliable than ordinary checks, which can bounce if the account holder has insufficient funds. Additionally, bank drafts are often used for larger transactions where payment certainty is crucial.