What's the Difference Between Certified Cheques and Bank Drafts?

 There are a few main differences between certified cheques and bank drafts. Bank drafts, also known as cashiers checks or official bank checks, are issued by a bank and are a safer form of payment than a personal check. While a bank draft does not carry the same guarantee as a certified cheque, the issuer of a bank draft guarantees payment to the payee as long as the bank draft is presented for payment.

Bank drafts are a good option for large payments and are available in many different currencies. Unlike certified cheques, bank drafts cannot be cancelled once they're issued. However, they can be replaced in case they're lost or stolen. A bank draft has two parts, the negotiable part and the non-negotiable one. You should treat the negotiable part like cash and keep the non-negotiable one for your records. A bank draft fee can range anywhere from free to $9.95. You can also expect to pay currency conversion fees when you purchase a bank draft in a foreign currency.

Bank drafts are generally used for larger purchases. Bank drafts are considered more secure than personal checks, as they provide a record of the transaction. A bank draft is usually made out to the person receiving the payment, rather than an escrow account. However, it is possible that your bank draft is misplaced or stolen, or even cashed by someone other than the payee. In such a case, you might lose a large amount of money.