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What Is A Bank Draft
What is a Bank Draft?
Introduction: Banking systems and banking processes around the world have been in evolution for many years. Ancient men used the barter system to trade goods and services. This was followed by the coinage. The coins were made as the principle form of trade among people. This form of trading was prevalent for a long time. Even today we use coins as a medium for trade among people. Since early days each region or group defined their own type of coins for trade. These groups or varieties were called as currencies.
In modern day world each country has its own currency. The countries of the world do trade activities through the currency and exchange rates. But when the money involved becomes huge, it becomes difficult to carry all those currency notes from one place to another. The modern day man discovered a new route to by pass this complicated process. That is what is called as Bank Draft.
Bank Draft: The bank draft is a word which is more commonly used in the United Kingdom. The Americans call it in a different way. They are known as cashier's check. In Canada it is known as Bank Draft. The Bank draft is issued by the Banks in order to eliminate the disadvantage of the traditional cheques. The cheques may be issued by people even thought there isn't enough money in the account for it to be cleared. This can be eliminated by the usage of the Bank draft, which can be acquired from the banks only when the required amount is paid in full along with a little amount of service charge to the banks. The banks then issue the draft to the concerned person.
The main advantage of the bank draft is that the amount is already paid for in full before the draft is issued, ensuring its clearance and credibility. Only in the case of a forged draft the bank draft is compromised. The duration of the holding of this money is for 10 years in Canada, after which the amount if unclaimed is transferred to the Bank of Canada. This acts a custodian or holder of the amount after the ten year time period. Such balances are commonly called as unclaimed balances.
Advantages: The bankers draft can be used for various purposes such as the purchase of services in corporate or commercial environment. Most of the commercial establishments prefer the bankers draft than the cheque due to the fact that the cheques may be issued without the required amount being in the bank account. However the draft can be issued by the bank even if there isn't an account for the customer.
The bank draft is also subject to various regulations and there are limits of how much money could be held in a bank draft. If the money becomes an unclaimed deposit for over 40 years and less than 1000 Canadian dollars, the Bank of Canada will act as the protector. But the chance of reclaiming becomes slimmer after this period of time. What is a Bank Draft?
Introduction: Banking systems and banking processes around the world have been in evolution for many years. Ancient men used the barter system to trade goods and services. This was followed by the coinage. The coins were made as the principle form of trade among people. This form of trading was prevalent for a long time. Even today we use coins as a medium for trade among people. Since early days each region or group defined their own type of coins for trade. These groups or varieties were called as currencies.
In modern day world each country has its own currency. The countries of the world do trade activities through the currency and exchange rates. But when the money involved becomes huge, it becomes difficult to carry all those currency notes from one place to another. The modern day man discovered a new route to by pass this complicated process. That is what is called as Bank Draft.
Bank Draft: The bank draft is a word which is more commonly used in the United Kingdom. The Americans call it in a different way. They are known as cashier's check. In Canada it is known as Bank Draft. The Bank draft is issued by the Banks in order to eliminate the disadvantage of the traditional cheques. The cheques may be issued by people even thought there isn't enough money in the account for it to be cleared. This can be eliminated by the usage of the Bank draft, which can be acquired from the banks only when the required amount is paid in full along with a little amount of service charge to the banks. The banks then issue the draft to the concerned person.
The main advantage of the bank draft is that the amount is already paid for in full before the draft is issued, ensuring its clearance and credibility. Only in the case of a forged draft the bank draft is compromised. The duration of the holding of this money is for 10 years in Canada, after which the amount if unclaimed is transferred to the Bank of Canada. This acts a custodian or holder of the amount after the ten year time period. Such balances are commonly called as unclaimed balances.
Advantages: The bankers draft can be used for various purposes such as the purchase of services in corporate or commercial environment. Most of the commercial establishments prefer the bankers draft than the cheque due to the fact that the cheques may be issued without the required amount being in the bank account. However the draft can be issued by the bank even if there isn't an account for the customer.
The bank draft is also subject to various regulations and there are limits of how much money could be held in a bank draft. If the money becomes an unclaimed deposit for over 40 years and less than 1000 Canadian dollars, the Bank of Canada will act as the protector. But the chance of reclaiming becomes slimmer after this period of time. What is a Bank Draft?
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