Definition, Meaning & Synonyms

bank draft

Noun

/bæŋk dræft/

Definition

A bank draft is a payment instrument issued by a bank that is guaranteed by the bank’s own funds, making it a secure form of payment.

Examples

The buyer provided a bank draft to the seller to guarantee the payment of the property.
After reviewing the contract, she decided to pay with a bank draft instead of a personal check.
He went to the bank to obtain a bank draft for his tuition fees.

Meaning

It is often used for transactions where a reliable payment method is required, such as real estate purchases or large business deals. A bank draft assures the payee that the funds are available and will be paid out by the bank.