From: Mark Blewett 
Newsgroups: uk.finance
Subject: Re: Bank draft.
Date: Thu, 03 Feb 2005 00:35:58 +0000

On Wed, 02 Feb 2005 20:29:34 +0000, BigMomma
 wrote:

>I know this is a bit basic, but I cannot understand what a "bankers 
>draft" is.  How does it differ from a cheque in the name of the bank? 
>How do you get a bank draft - just pay the bank cash? And does it have 
>to be in a bank where you have an account?

A simplistic view of Bankers Drafts based on the times I have used
them.. it maybe wrong.. but its my understanding.

If you write a cheque the payee does not know if you have the funds in
your account to cover the amount.. usually thousands, so a cheque card
is not much use! 

With a bankers draft, you go to the bank and ask for one. They check
if you have the funds, and take the amount from your account. In turn
they give you the banker draft. What this means is the bank is
guaranteeing to pay the cheque not you.

For a payee, having a bankers draft which is guaranteed by HSBC,
Natwest or what ever bank means they are more certain of being able to
cash it (compared to an unknown individual writing a cheque).

Thats all it means.. you you the drawer pay the bank for the
"priviledge"