Banker's Draft

A banker's draft is a specialised cheque that is drawn against the bank rather than from a personal account. It usually incurs a flat fee, which varies between financial institutions. Banker's drafts are ordinarily used for large transactions. Since they are drawn against the bank you are usually unable to stop a draft in the same way that you can stop a personal cheque. Banker's drafts are available in foreign currencies for international transactions. You might use a banker's draft if you wish to make a large purchase and are unwilling to pay in cash but feel it is unlikely that a personal cheque will be accepted for such a large amount. You will have to pay the value of the draft to the bank plus an administration fee. A banker's draft is effectively cash: if you lose it, you will have lost the money.