Is Bank Draft Better Than Certified Cheque? See Details

This article will discuss the best between a bank draft better vs certified cheque. Bank drafts and certified cheques are instruments issued by a financial institution to an individual for usage. They are both utilized in settling various payments for diverse transactions conducted.

Key Takeaways In This Article

• You will learn about bank drafts and certified cheques.
• You will know how bank draft and certified cheque works.
• You will understand the difference between a bank draft and a certified cheque.
• You will determine the best between a bank draft and a certified cheque.
• You will know the risks involved in accepting a bank draft.

bank draft better vs certified cheque

What Is Bank Draft?

A bank draft is an instrument that guarantees the payment of funds by the particular issuing bank. The bank usually issues it at the payer’s request, and it allows for payment settlement.

How Bank Draft Works

A bank draft is an instrument that allows one to get guaranteed payment from the specific bank issuing it. Through the usage of bank drafts, you can settle different individuals to who you need to send money. Once a bank draft is issued, it guarantees funds and doesn’t bounce despite lacking funds.

An individual can access the funds on their bank draft four days after it has been paid. Bank drafts are best utilized for more significant amounts and in the case where individuals or organizations do not accept a personal cheque.

What Is a Certified Cheque?

A certified cheque is a type of cheque for which the bank ensures adequate funds are available before they can be drawn from the specific issuing account. This type of cheque is referred to as a personal cheque.

How Certified Cheque Works

A certified cheque is a “Promise of Payment” rather than cash which indicates that there are enough funds in the writer’s account. Once a writer issues a certified cheque to a recipient, the recipient would need to take it to the bank to receive funds.

After that, when the recipient gets to the bank and submits the cheque, the bank will certify the funds in the account and then draft a cheque for that specific amount.

Bank Draft Vs. Certified Cheque: Which Is Better?

Bank drafts and certified cheques are two of the many services banks provide to their customers to assist them in carrying out their respective activities. Despite being similar, they are different in some ways. The bank typically issues bank overdrafts, and it is fully guaranteed by the bank that funds can be drawn.

On the other hand, the certified cheque is used by customers to make payments for goods and services, and the bank would need to confirm that there are funds before payment can be made.

There is no indication as to the specific financial service which is better. One would need to understand each of them to determine the best to handle their needs.

The Difference Between Drafts And Cheques

Despite being two services offered by diverse financial institutions, drafts and cheques differ. Below are the differences between drafts and cheques.

• Meaning

A bank draft is a payment instrument issued by a specific bank at the immediate request of the payer. At the same time, cheques allow one to settle different transactions.

• Issuer

The bank typically issues a bank draft on request from its customer list. After that, the bank transfers to the specific bank account. The certified cheque is issued by a customer with an account with the bank and orders the bank to pay a certain amount to the bearer.

• Stop Payment

One would need to lose or destroy a bank draft to stop payment, while a certified cheque is impossible to stop payment once it has been accredited.

• Particulars

The particulars on a bank draft include the date, the amount payable, and the payee’s name all included. Certified cheques include the date, name, amount in words and figures, and signatures.

• Signature

A bank draft does not necessarily require a customer’s signature. It mainly needs the bank’s official signature on it. A certified cheque requires a customer’s signature to be valid.


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Is Bank Draft Safer Than Cheque?

A bank draft is one of the instruments issued by a bank that guarantees sufficient funds. In contrast, a cheque is issued by a customer who has an account with the bank, ordering that a particular amount be paid to the named payee.

The safer option between a bank draft and a cheque is a bank draft. It is the best option since there would not be any issue of insufficient funds as can be faced with a cheque.

Is A Bank Draft Considered Certificate Funds?

Yes, bank drafts are considered to be certified funds. A bank draft is certified by a bank official, and it guarantees payment as the bank ensures sufficient funds are in the specific account.

Why Draft Is Better Than A Cheque?

A draft and a cheque are instruments of a financial institution and can be used by diverse individuals and businesses. A draft is better compared to a cheque because it has a guarantee that funds are available in the account, whereas a cheque can bounce due to insufficient funds.

What Are The Risks Of Accepting A Bank Draft

Even though a bank draft is a good service from the bank which guarantees funds, there are still some risks attached to its acceptance. Below are the risks of accepting a bank draft.

• A Bank Draft Is Subject To Fraud

One risk of accepting a bank draft is that it’s subject to fraud. If it is lost, altered, or stolen and the wrong individual obtains the funds, the bank will not replace any money.

• A Bank Draft Cannot Be Cancelled After Delivery

Another risk of a bank draft is that it cannot be canceled once it has been presented to the payee.


Bank draft and certified cheque are both financial service provided by a bank and helps customers to suitable conduct transactions and make payments. An individual would need to consider their features before actually deciding to use either of them.

We hope this article provides detailed information on which is better, a bank draft and a certified cheque. Kindly visit our comment section for your view and opinion.

You can learn more from the video below:

About Author

bank draft better vs certified cheque
Victor Akpan
I am a content writer with over 2 years of experience in content writing. I create quality and highly researched content on cryptocurrency and forex.

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