Banker's draft qustion

other bank will process it exactly the same way as any other cheque ie through the clearing system. Barclays, say, have no way of checking the authenticity of the signature on that Halifax cheque until it is presented for payment to them. Many businesses will accept Bank cheques as guaranteed but they are not. If you receive one from someone how do you know if it is genuine? My advice is from anyone paying by any sort of cheque draft etc is not to release goods until you know it has been cleared. Eric

Thanks Eric, so in effect a 'banker's draft' is something left over from a bygone era, if it ever existed, and is best confined to films and TV rather than the real World?

Even then it's not really safe is it?

See the thread "Cheque clears but later "unclears"". Had that happen to me before - worse was, it was my wages from my employer!!!!

I'm about to repost to that thread, but I'd be interested to know more of the background to your example of a cheque payment being withdrawn after it apparently cleared -- was there some kind of fraud involved?

Matti

The bankers draft cannot be stopped like a cheque, unless it's stolen or fraudulently altered. And it won't bounce from lack of money unless the bank goes bust. So that's two big benefits over a cheque!

As for the "is it genuine?" thing, well if its really important, and you are nice, you can get your own bank to phone the issuing bank to confirm they did in fact issue the draft to that person (the guy who's giving it to you) and that its details are the same. *His* bank may even talk to you about it if he tells them to. In short, a bankers draft is much *much* better than a cheque - especially if you understand the system!

-- Dave

In message , John Smith writes

'Bank Drafts' are not cheques because the drawer and the drawee are the same. Technically they can be stopped but a bank would be reluctant to do that as it would destroy the integrity and negotiability of all their drafts. They would not be dishonoured due to lack of funds. Most of the new fangled 'pretend' banks dont issue drafts at all, they just issue 'cheques' drawn on an impersonal account within the institution.

Now that protection for bankers negotiating cheques and bills of exchange have tightened, and coupled with the commonly used electronic transfer methods, Drafts are far less in demand these days.

They are quite useful if you want to buy a car, or pay a deposit on a rental property.