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What are bank drafts exactly?

  • 04-03-2011 3:35pm
    #1
    BESman
    Closed Accounts Posts: 563 ✭✭✭


    Can someone explain the mechanics behind a bank draft to me please? I know they are different to cheques but in what way?

    My understanding is that a bank draft is credited from your account when it is issued, i.e. before it is lodged or cashed by the person you are sending it to. If you were therefore to send the draft and it got lost or stolen could you cancel it and will the bank then refund the money to your account? I think I may have this all backwards so any help is appreciated.


Comments

  • #2
    Colts
    Registered Users, Registered Users 2 Posts: 149 ✭✭Colts


    You're pretty much spot on.

    You can get a draft cacelled or re-issued if it is lost or stolen, although it will take longer to cancel than a cheque, just make sure you hold on to your receipt and documentation from it just in case!


  • #3
    BESman
    Closed Accounts Posts: 563 ✭✭✭BESman


    Colts wrote: »
    You're pretty much spot on.

    You can get a draft cacelled or re-issued if it is lost or stolen, although it will take longer to cancel than a cheque, just make sure you hold on to your receipt and documentation from it just in case!

    Does it have to be lost or stolen, or can you cancel it anytime, say if you wanted to cancel a transaction before someone cashed it?


  • #4
    tenchi-fan
    Closed Accounts Posts: 3,339 ✭✭✭tenchi-fan


    BESman wrote: »
    Does it have to be lost or stolen, or can you cancel it anytime, say if you wanted to cancel a transaction before someone cashed it?

    Google it.

    Bank drafts are almost as good as money. Any bank will accept them, they're almost impossible to track as they don't use the same clearing system as cheques, and the bank probably won't just cancel one because you changed your mind about a transaction.


  • #5
    djk1000
    Closed Accounts Posts: 899 ✭✭✭djk1000


    I remember hearing about a guy that got a bank draft for 6 figures, to go to the UK and buy a property. He lost the draft, the bank would only refund him the money once the draft had expired, in case it was cashed by someone else. He had to wait a year I think.


  • #6
    sankari
    Closed Accounts Posts: 7 ✭sankari


    Bank drafts is sometimes used to refer the automatic transfer from your bank account to your service provider during the payment of bills. This would be more secure for the sellers as the funds are guaranteed by the bank that issued the draft.


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  • #7
    tenchi-fan
    Closed Accounts Posts: 3,339 ✭✭✭tenchi-fan


    sankari wrote: »
    Bank drafts is sometimes used to refer the automatic transfer from your bank account to your service provider during the payment of bills. This would be more secure for the sellers as the funds are guaranteed by the bank that issued the draft.

    Are you sure about that? It sounds like you're trying to describe a DD.


  • #8
    Fishyfreak
    Registered Users, Registered Users 2 Posts: 576 ✭✭✭Fishyfreak


    BESman wrote: »
    Does it have to be lost or stolen, or can you cancel it anytime, say if you wanted to cancel a transaction before someone cashed it?

    That's illegal i'm afraid.


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