International banker’s drafts guide
Send large payments overseas securely.
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.
What is an international banker’s draft?
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draft as a more secure way of receiving money abroad – it’s more secure because the funds for the transaction are withdrawn from the bank, rather than from the person’s account.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:
- Exchange rate. Banker’s drafts are exchanged immediately when they’re created. So going to your bank and creating an international banker’s draft for €100 will use that day’s exchange rate, while a cheque or postal order will use the exchange rate when it’s cashed – which could lead to less money being sent if the exchange rate shifts heavily.
- Typically safer. Many money scams involve fake postal orders or cheques. An international banker’s draft can be verified by contacting the issuing bank and providing the details on the draft itself.
How does an international banker’s draft work?
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 This means the funds for the transaction are withdrawn from the institution, rather than from the individual’s account.
The funds from a normal cheque aren’t withdrawn from the individual’s account until the cheque is cleared, which leads to the risk of there not being sufficient funds available when the cheque is cashed and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 crunch the numbers: Sending £2,000 to Kenya
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 22 April 2024.
| Money transfer | International banker’s draft | |
|---|---|---|
| Fee | £0 | £15 + receiving bank fees |
| Exchange rate | 1 GBP = 162.804 KES | 1 GBP = 151.717 KES |
| Transfer speed | 1–2 days | 1–3 weeks, depending on mail |
| Amount received | KES 325,608 | KES 303,434 |
| 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. You also you pay a £15 fee for the privilege. If you go with the money transfer service, your recipient ends up with KES 22,174 more than the bank offers.
How do I cash an international banker’s draft?
You can cash a banker’s draft in a variety of ways, including:
- At the bank. Bring the banker’s draft to your bank, along with photo identification, and ask for it to be deposited into your account.
- At a cashpoint. Some banks let you deposit banker’s drafts at cashpoints, as long as you hold an account with the bank. However, bear in mind that funds may not be immediately available.
How to compare international banker’s drafts
- Fees. This is the most important factor to look at when comparing banker’s 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 about the currencies in which you can obtain an international banker’s draft and the countries to which you can send them. If your bank doesn’t support banker’s drafts in your desired foreign currency, compare international money transfer options to send a transfer online.
- 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 banker’s draft. You’ll typically need to visit a branch or apply in writing.
Pros and cons of an international banker’s draft
Pros
- Accepted in most parts of the world. International banker’s drafts are used in the majority of countries around the globe.
- Inexpensive. Although you’ll have to pay a fee when you apply for an international banker’s draft, it’s still a relatively cost-effective way to send funds overseas.
- Created in the local currency. As the draft is made out in the local currency where it will be sent, it doesn’t require conversion and is therefore able to be banked quicker than a cheque written in GBP.
- Secure. Banker’s drafts must be deposited into a bank account and cannot be cashed.
Cons
- Slow. Banker’s drafts typically take several weeks to process, so they’re only a viable option where the speed of the transaction isn’t a concern.
- Availability. There’s a chance your bank may not support the currency and country you want to send an international banker’s draft to.
- Time-consuming to replace. Banker’s drafts are secure and can be replaced when lost, but the process is far from easy. Every bank has its own procedure, and at the very minimum you’ll have to wait for the draft to be delivered a second time.
Is an international banker’s draft my best option?
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.
Using a banker’s draft to pay someone abroad
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:
- Speed is important. Some international money transfer companies can have money in your recipient’s account in as little as a few minutes.
- You want to pay in cash or with a credit card. An international banker’s draft is limited to payment by bank account, so use an international money transfer service to pay by debit card, credit card or cash.
- Your bank is closed. Banker’s drafts have to be created at the bank, in person, but online money transfers can be sent 24/7, 365 days a year from the comfort of your home.
- Exchange rates are important. An international banker’s draft uses the exchange rate offered by your bank, which might not be as strong as the mid-market rate offered by many money transfer companies.
Bottom line
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