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The Basics of a Bank Draft

A bank draft [1] is a draft or check that is guaranteed by a bank [2]. It allows a check to drawn by one bank against cash that is deposited into its account located at another bank. It allows the second bank the authorization to make a payment to the individual that is named in the draft. They can be treated like cash and most banks [2] will clear them immediately. There is a catch, however. If it is found that the draft is fraudulent, the bank is permitted to take money back from a cleared draft up to one or two weeks after processing. This policy may have been put into place because there has been an increasing amount of bank draft and cashier’s check schemes and many customers have been defrauded out of a lot of money because of these phony drafts.

Bank drafts have similar features. They usually feature the name of the issuing bank in a prominent place. It is usually the upper left-hand corner or located on the upper center of the draft. It will also include other security [3] features such as watermarks, a security thread, color-shifting ink and special bond [4] paper. These are all characteristics that will make it more difficult to forgers to make counterfeit copies of these drafts.

The payee’s name, the numeric amount and its written equivalent, the remitter’s information and tracking information are all also printed on the front of the check.