Similar to cashing regular checks, a person can cash bank drafts, which are checks issued by a bank, by depositing it into an account. The issuing bank guarantees the availability of funds.
A person asks a bank for bank drafts or cashier's checks. The bank issues drafts by drawing the funds from the person's account. Typical uses include real estate transactions and large purchases like cars.
In some instances, bank drafts are part of fraud schemes. Consumer protection sources recommend accepting bank drafts only from local banks. Also, calling the issuing bank to confirm availability of funds is a good precaution, especially if the bank is unknown, foreign or part of an Internet transaction. Once deposited, the account holder may be responsible for loss of funds.