What is a bank draft?

A bank draft is a type of cheque drawn by a bank either on its own branch or on another bank in favour of a third party. It is payable to the person named in it or to his order and is always payable on demand — hence it is also known as a 'demand draft'.

A bank draft is the most convenient and safe means of sending money from one place to another because the amount along with commission is paid in advance to the bank. The receiver gets the amount of the draft from the concerned bank against the draft.