What Is A Bank Draft

Written By: Traci Dillon on September 10, 2010 No Comment

When it comes to debating the usefulness of Bank Drafts Vs. Money Orders it could well by they are equally well matched. Both of them are secure methods of payment and generally accepted both at home and abroad as equivalent to currency. Neither may be be redeemed or cashed by anyone other than the individual whose name is listed as the payee. There are only some minor differences that appear to make one preferable to the other.

Money orders may be issued by the post office and are guaranteed by the postal service. They could be issued by banks as well and the bank stands good for the payment. Both of these forms are paid at the time of issuance and neither is issued in amounts greater than one thousand CAD/USD.

A money order does have the advantage of being convenient and available from both post offices and banks. It can be issued in British Pound Sterling, CAD and USD and it can be used easily to send money abroad. Costs vary from the post office from 4.50 to 7.00 CAD. Banks charge a slightly lower fee of around 4.00 to 6.00 CAD and the variation in price depends upon the currency selected and the location it is to be sent.

Because these drafts are prepaid they are considered far superior to personal checks which may not be accepted everywhere and almost as good as cash. They are far more secure than sending cash as they may not be endorsed or redeemed by any person other than the payee listed on the front. They may also be issued in almost any currency desired and sent to almost any place in the world.

The charge for issuing a bank draft is around the same as a money order. A draft might be most useful when amounts over 1000 CAD/USD need to be sent. With larger payments a draft is a valid way to send funds securely.

Both of these methods of payment are more secure than cash and protected against counterfeits with multiple security measures. Neither may be cashed by a person other than the one named as payee. In some circumstances either of these might be replaced however that usually will require some paperwork and will depend upon the circumstances.

Both methods are secure and are recognized both home and abroad and often treated the same way currency would be. Both of these methods of payment are readily available in multiple locations and inexpensive. The draft is perfect for when amounts over one thousand dollars must be sent. Both have a purpose and fulfill it admirably. The purpose is to ensure the funds arrive to the designated person safely.

Finding a reliable bank in Canada is not easy, check out where to make a draft or money order.