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A bank draft is a negotiable instrument where payment is guaranteed by the issuing bank. Banks verify and withdraw funds from the requester's account and deposit them into an internal account to cover the amount of the draft. A seller may require a bank draft when they have no relationship with the buyer.

A bank draft is a payment on behalf of the payer, which is guaranteed by the issuing bank. A draft is used when the payee wants a highly secure form of payment. The bank can safely issue this guarantee because it immediately debits the payer's account for the amount of the check, and therefore has no risk.

Basically, treat bank drafts like cash. These are useful when you need to make a payment with guaranteed funds and commonly used, for example, when paying a legal settlement or making a large purchase for a home or vehicle.

Obtaining a bank draft requires depositing funds equal to the check amount and applicable fees with the issuing bank. The bank creates a check to the payee drawn on the bank's account. The check notes the remitter's name, but the bank appears as the entity making the payment.

A Bank Draft is a physical means of providing payment to a third party. Funds are immediately taken from your RBC bank account in exchange for the draft, guaranteeing the funds for the recipient.

Bank drafts provide the person receiving the funds with a guarantee that they're available. They're more reliable than a cheque, which can bounce due to insufficient funds. For the person making the payment, it's easier and more convenient to give someone a bank draft than to carry around thousands of dollars in cash.

A draft is used when the payee wants a highly secure form of payment. The bank can safely issue this guarantee because it immediately debits the payer's account for the amount of the check, and therefore has no risk. In effect, the required funds have been set aside by the bank.

As long as the bank can verify that the draft has not been cashed, it can cancel it and issue a new, replacement draft. It is a good idea to verify cancellation and replacement policies with the issuing bank.

What is autodraft? Autodraft means setting up a regular payment that is automatically withdrawn (or ?drafted?) from your banking account on a specific day of the month that you decide. (It's sometimes called ?autopay? or ?ACH withdrawal.?) Then your payment is deducted from your account on the same day every month.

Is it necessary to have a bank account to issue a demand draft? Demand drafts are issued by the banks regardless of the bank accounts of the drawer. A DD can be issued either against money paid by a cheque or in cash. Demand draft issuance through cheque requires a bank account.