Drafts are not safe—they can overdraw your account and cost you money
A draft is a written order to your bank to pay someone else from your checking account. It looks like a check but is not a check. The person or business you give it to can deposit or cash it, and your bank will pull the money from your account. The problem: if the money is not there when they try to cash it, your bank will either refuse to pay (and charge you a fee), or pay it anyway and charge you an overdraft fee—sometimes both.
Drafts are riskier than checks because they move faster through the banking system and give you less time to stop payment if something goes wrong. They also do not have the same legal protections that checks do. If you lose a draft or someone steals it, you have fewer ways to recover the money.
Key Takeaways
- A draft clears your account faster than a check, so money leaves your account within one or two business days instead of three to five.
- If a draft bounces, your bank charges an overdraft or non-sufficient funds (NSF) fee, usually $25 to $35, and the recipient may charge you a fee too.
- You cannot stop payment on a draft the way you can on a check—once it is cashed or deposited, the money is gone.
- Drafts are not covered by the same fraud protections as checks, so if someone forges your signature or steals a blank draft, recovery is harder.
How drafts move through your bank differently than checks
When you write a check, it goes through a clearing process that can take three to five business days. During that time, the money stays in your account, and you can stop payment if you need to. A draft skips most of that process. Your bank treats it like an electronic payment and pulls the money within one or two business days.
This speed is why drafts are popular with landlords, utility companies, and businesses that want to be sure the money will arrive. But it is also why they are dangerous for you. If you write a draft for $800 and only have $600 in your account, your bank will likely pay it anyway and charge you an overdraft fee on top of the $800 withdrawal. You end up owing the bank money you did not plan to spend.
Some banks offer overdraft protection, which links your checking account to a savings account or credit line. If a draft bounces, the bank pulls money from the backup source instead of charging you a fee. But this protection does not apply automatically—you have to set it up, and it only works if you have money or credit available.
What happens when a draft bounces
If you do not have enough money in your account when a draft is presented, your bank will either refuse to pay it or pay it and charge you a fee. The outcome depends on your bank's policy and whether you have overdraft protection.
If the bank refuses to pay, the draft is returned to the recipient marked "non-sufficient funds" (NSF). Your bank charges you an NSF fee, usually $25 to $35. The recipient also has the right to charge you a fee for the returned draft—often another $25 to $35. That means a single bounced draft can cost you $50 to $70 in fees alone, plus you still owe the original amount.
If your bank pays the draft anyway (overdraft), you are charged an overdraft fee and now owe the bank the full amount plus the fee. If you do not cover the overdraft quickly, your bank may charge you another fee a few days later. Some banks charge overdraft fees every day until your account is positive again.
Why you cannot stop payment on a draft like you can on a check
With a check, you can call your bank and ask them to put a stop payment on it. The bank will refuse to pay it if it comes through, and you pay a stop payment fee (usually $25 to $35). This works because checks move slowly enough that your bank can intercept them.
Drafts move too fast. By the time you realize you need to stop it, the money has already left your account. Most banks will not honor a stop payment request on a draft because the draft has already cleared. Even if you call within minutes, the draft may have already been processed.
This means you have almost no recourse if you write a draft by mistake, if someone forges your signature on a draft, or if you change your mind about the payment. The money is gone, and your only option is to ask the recipient to refund it—which they may refuse to do.
Fraud and forgery protections are weaker for drafts
Checks are covered under the Uniform Commercial Code and federal banking law. If someone forges your signature on a check or steals a blank check, you have legal protections. Your bank is required to investigate and usually must refund the money if the forgery is proven.
Drafts do not have the same protections. Because they move through the system so quickly and are treated more like electronic payments, the legal responsibility for fraud is less clear. If someone forges a draft in your name, your bank may not refund it, and you may have to pursue the matter in small claims court or with a lawyer.
This is another reason to keep blank drafts secure. Do not leave them lying around, do not give them to people you do not trust, and do not mail them unless you have to. If you lose a draft or suspect someone has stolen one, contact your bank immediately and ask them to watch for it.
When drafts are actually used and why
Most people do not use drafts anymore because checks and electronic payments are safer and more common. But some businesses and landlords still request them, especially for large payments like rent or security deposits. Drafts are also used in some real estate transactions and by certain government agencies.
Businesses prefer drafts because they clear faster and are harder to stop than checks. From your perspective, that is a disadvantage. If you have a choice, ask if you can pay by check, electronic transfer, or credit card instead. If you must use a draft, make sure you have the money in your account before you write it, and keep a record of the draft number and amount.
How to protect yourself if you have to use a draft
If someone asks you to pay by draft, follow these steps to minimize risk. First, make sure you have enough money in your account to cover the draft plus any fees. Do not write a draft if your balance is close to the amount—leave a cushion of at least $100 to $200 to account for other transactions that may be pending.
Second, write the draft carefully. Use a pen, not a pencil. Write the amount in both numbers and words, and make sure they match. Sign the draft the same way your signature appears on your bank account. Do not leave blank spaces that someone could fill in later.
Third, keep a record of the draft. Write down the date, the recipient's name, the amount, and the draft number (if there is one). Do not mail the draft unless you have to—hand it to the recipient in person if possible, so you know it arrived safely.
Fourth, ask your bank about overdraft protection. If you set up a link to a savings account or credit line, your bank can cover a bounced draft without charging you an overdraft fee. This does not make drafts safe, but it reduces the cost if something goes wrong.
Frequently Asked Questions
Can I get my money back if someone forges my name on a draft?
It depends on your bank and the circumstances. Drafts have weaker fraud protections than checks, so your bank may not refund the money automatically. Contact your bank immediately and ask them to investigate. If they refuse to help, you may need to file a police report and pursue the matter in small claims court.
What is the difference between a draft and a check?
A draft clears in one to two business days; a check takes three to five. You can stop payment on a check but usually not on a draft. Checks have stronger legal protections against fraud. Drafts are treated more like electronic payments and move faster through the banking system.
Will my bank charge me a fee if a draft bounces?
Yes. Your bank will charge you an NSF fee (usually $25 to $35) if the draft bounces. The recipient may also charge you a returned-payment fee. If your bank pays the draft anyway, you will be charged an overdraft fee instead. You may be charged multiple fees if your account stays negative.
Can I write a draft if I do not have enough money in my account?
You can write it, but your bank will either refuse to pay it or pay it and charge you fees. Do not write a draft unless you have the money in your account. If you have overdraft protection set up, your bank may cover it from a linked account or credit line, but you will still owe that money.
Is it safer to use a check or a draft?
Checks are safer. They clear more slowly, giving you time to stop payment if needed. They have stronger legal protections against fraud. If you have a choice, use a check or electronic transfer instead of a draft.