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Bankers draft - what is it??!!
andy8442
Posts: 200 Forumite
Could someone please give me a definition of a bankers draft, and how they work? I've been given 2 different descriptions:
1) The bankers draft confirms ONLY that there are sufficient funds in the account, at the point it is taken, but does not place any reserve on the funds (meaning money could be taken out before the draft clears), and it takes as long as a regular cheque to clear.
2) The cheque is a guaranteed payment.
Which of these is right? Can it vary from bank to bank?
1) The bankers draft confirms ONLY that there are sufficient funds in the account, at the point it is taken, but does not place any reserve on the funds (meaning money could be taken out before the draft clears), and it takes as long as a regular cheque to clear.
2) The cheque is a guaranteed payment.
Which of these is right? Can it vary from bank to bank?
0
Comments
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See here:-
http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=828&a=10295
"Bank drafts are cheques drawn by a bank usually on its own Head Office. Payment is guaranteed provided the draft is genuine and has not been lost or stolen. If it is fraudulent or conterfeit it will not be paid."0 -
When you go into the bank and request a Bankers Draft, the money is taken out of your account at that point - this is why the cheque is guaranteed to be paid (provided it's not lost/stolen/fraudulent).0
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If you are trying to find out if it is subject to the clearing cycle then yes it is as it could be counterfeit etc0
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