Bank Drafts Vs Certified Cheques

 Having a bank draft handy is a great way to pay for large purchases. However, this method of payment is prone to fraud and other risks. You never know who might steal your bank draft, and you could have it cashed out by the wrong person. In addition, you can't get your money back if you lose it. This makes bank drafts popular for large purchases such as purchasing a house.

A bank draft is a check issued by a bank. It is similar to a cashier's check, except that it is guaranteed by the issuing bank. It is safer than accepting a personal check for large payments. However, a bank draft requires that the person who writes it has available funds to cover the amount. The bank will freeze the funds needed to pay the amount on the bank draft until the buyer presents it to make the payment.

While a certified cheque is not as secure, it does not pose the same risks. The bank will only certify your cheque if it is drawn on its home branch, which may be inconvenient if you move. On the other hand, a bank draft can be verified by another bank, since it is a bank instrument and has a serial number.

Bank drafts are similar to certified cheques, with the main difference being that a bank will often keep money aside in a bank draft account. A certified cheque, on the other hand, will require a bank employee to verify the issuer's funds. Once this process is complete, the issuer can withdraw their money from their account.