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An international banker’s draft is accepted in most countries and is created in the currency of the destination where it’s sent. Although there are much quicker ways to send money overseas, if time isn’t a factor when you’re transferring money to someone overseas, banker’s drafts are a decent option.
Also sometimes known as a ‘bank cheque’, a banker’s draft is like asking a bank to write a cheque for you. Some people might ask to receive an international banker’s draft as a more secure way of receiving money abroad – it’s more secure because the funds for the transaction are withdrawn from the bank, rather than from the person’s account.
Unlike normal cheques, banker’s drafts are prepaid and issued by the bank. Drafts can also be drawn in the foreign currency you choose and are available for personal or business use. They have a few advantages when used for international transfers:
A banker’s draft is effectively a cheque from a financial institution. This means the funds for the transaction are withdrawn from the institution, rather than from the individual’s account.
The funds from a normal cheque aren’t withdrawn from the individual’s account until the cheque is cleared, which leads to the risk of there not being sufficient funds available when the cheque is cashed and it may therefore bounce.
When someone requests an international banker’s draft, though, they must immediately transfer the funds from their account to cover the amount of the cheque, which adds a crucial extra level of security. Drafts can be drawn in the foreign currency you choose and are available for personal or business use.
Let’s say you need to send £2,000 to Kenya. Here’s what you might face as far as costs when using an international banker’s draft compared to an international money transfer as of 28 September 2020.
Money transfer | International banker’s draft | |
---|---|---|
Fee | £0 | £15 + receiving bank fees |
Exchange rate | 1 GBP = 139.36 KES | 1 GBP = 137.41 KES |
Transfer speed | 1-2 days | 1-3 weeks, depending on mail |
Amount received | KES 278,728 | KES 274,822 |
Verdict |
|
|
As you can see, the international banker’s draft is much slower and gets a smaller amount of money to your recipient in Kenya. If you go with the money transfer service, your recipient ends up with KES 3,906 more than the bank offers.
You can cash a banker’s draft in a variety of ways, including:
An international banker’s draft is a secure way to send money abroad – but you have to rely on the postal service to deliver the banker’s draft safely. Many things can go wrong along the way, and even when everything goes right, there will still be a significant delay between sending and receiving the draft.
Consider using an international money transfer service instead of a banker’s draft when speed and convenience are crucial.
The transfer services below are not banker’s drafts, but rather allow you to make bank transfers which can be received by your recipient in their bank account or as cash. Consider using these services when:
An international banker’s draft has its time and place, but as the financial world shifts more and more into the digital realm, it might become obsolete. There are many ways to send money abroad that can be done entirely online. To learn how to get started with international money transfers, head over to our guide on transferring money abroad.
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I have family members travelling back from China to UK on 21/12/18. what is the best way of moving money from a Chinese bank account to a UK bank account in that timescale
Hi Paul,
Thanks for getting in touch with finder. I hope all is well with you. :)
The best way of moving money would depend on your needs, preference, and budget. There are at least three ways for you to transfer money. One is through a bank to bank transfer. Next is using money transfer companies. Third is using a bank draft like what is described in this page.
You can explore each of these options and see which of them gives you the best offer.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
I want to transfer EUR 172,000 through an international transfer of funds. What should I expect to pay?
What should I do if the bank did not provide me with information on fees when making international transfers? On the contrary, the bank has demanded five different non-small charges and has always claimed it is the last one?
Hi Anna,
Thanks for getting in touch with finder. I hope all is well for you. :)
Let me answer your questions one by one.
When transferring a large amount of money, there are different fees you need to consider. One is the exchange rate. Depending on the amount of money you are transferring, the exchange rate can have a significant effect on how much money you are receiving.
Next consideration is the money transfer service provider. There are many providers of International Money Transfers, but some specialise in large sums of money more than others. When picking a provider, it’s important to keep in mind not only the rate you are getting and fees they are charging (if any), but also the quality of the service.
To learn more about transferring money overseas, please read our guide, “Need to send large amounts of money abroad?”
For your next question regarding the bank, it is important that you understand what you are being charged with. In this case, talking to the bank will help you know more about their services what you might expect to pay them. If in case you can’t accept the terms and conditions of a bank, you may want to look for another bank or other means of sending your money.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua
My internet bank does not provide bank drafts. Do I need to open an account with anorher bank in order for them to prepare an international bank draft?
Hi there!
Thanks for your question.
Yes, you would need to open an account with another bank for. A personal account manager will prepare an international bank draft for you and you would immediately need to transfer the funds from your account to cover the amount of the cheque.
Also, it is important to take note of these factors in using an international bank draft below:
Fees: This is the most important factor to look at when comparing bank drafts. Look at the different fees charged for obtaining a draft and see if you could save money with a different provider.
Available currencies and countries: Speak to your bank or financial institution about the currencies in which you can obtain a bank draft and the countries to which you can send them.
Processing time: Once you apply for a draft, how long will it take for your financial institution to process it?
Application options. It’s also a good idea to compare the different methods available when applying for a bank draft. You’ll typically need to visit a branch or apply in writing.
In choosing the correct bank to get the international bank draft from, you may use this link: https://www.finder.com.au/international-bank-drafts
Hope this help answered your concern,
Come back to us should you need further assistance.
Thanks and best regards,
Nikki
Do you know which high street bank provides an international bank draft service?
Nikki, thank you. I am having difficulty in finding a high street bank that provides international bank drafts. I’ve tried RBS, HSBC, and Barclays. Do you know any bank that provides this facility? Many thanks.
I would still like to know if there is an answer to the above question. I need to pay the US embassy with a Foreign Bank Draft (in dollars) but I can’t find ANYWHERE in the UK that offers this service. My next step is having my mother arrange it in the US! Any wisdom?
Hi Danielle,
Thanks for getting in touch with finder. I hope all is well with you. :)
If you are having trouble finding a bank that offers a foreign bank draft, this could be because of the fact that the use of international bank drafts is declining. While we don’t have a list of providers that offer bank drafts, you might want to try international money transfers which can be typically processed between 24 hours and five days.
Aside from money transfer, you may also explore the option of having your mother pay the US embassy for your transaction.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua