Bank Draft Vs Certified Cheques - What's the Difference?

 Banks in Canada offer several different types of payment methods, including certified cheques and bank drafts. Both of these options offer similar operations and features. Certified cheques are used when you need to send large sums of money, but a bank draft can be used for smaller transactions.

Bank drafts are issued by banks and have a guarantee that the bank will make the payment. These types of payment are considered more secure than standard cheques because they can only be issued to those who have an account with the issuing bank. The payer must maintain an account with the issuing bank, and the bank will review the payer's details and account balance to make sure that the payment will be made. Certified cheques are signed by the payer and are considered a safer form of payment than regular cheques.

Certified cheques are issued by a bank, and unlike bank drafts, they cannot be canceled. When the bank receives the certified cheque, it blocks the amount and transfers it to the payee. Then, the recipient cashes it. This makes bank drafts more secure because the bank can't stop payment because the issuer's bank didn't have the funds to cover the amount.

When choosing between bank drafts and certified cheques, always consider fees. Bank drafts are cheaper to deposit at ATMs, but the amount you're sending is often lower than the amount you need to pay. Certified cheques, on the other hand, are better for larger amounts and can be more secure.