A bank draft offers guaranteed funding, as the institution issuing it has already collected money to cover its value, while a check draws funds from an individual's account. Unless the purchaser of the bank draft asks the bank to stop payment, the bank pays it; however, banks sometimes return checks due to insufficient funds in the account, according to About.com.
When an individual presents a check to the bank upon which it is drawn, the bank pays the amount of the check to the holder, cancels the check and returns it to the checkwriter as a receipt, according to Reference.com. Often, an individual receiving a check present it to his own bank for deposit, in which case, the check goes through a clearinghouse on its way to the writer's home bank, with funds transferring through the clearinghouse as well.
While most people feel more secure with a bank draft than with a personal check, when the draft involves large amounts of cash, precaution is advisable. An increasing number of cases include the use of a counterfeit bank draft to swindle unsuspecting victims. Before handing over any merchandise, About.com recommends verifying with the issuing bank. It recommends consumers be wary of individuals who overpay using a cashier's check and ask the recipient to return the overpayment in another form.