Payable Through Draft


DEFINITION of 'Payable Through Draft'

A draft that is payable through a specific bank. Payable-through-draft instruments draw money from the account of the issuer. Corporations use these instruments to pay bills, and insurance companies use them to pay claims.

BREAKING DOWN 'Payable Through Draft'

The bank's name is printed on the face of the draft. However, it does not verify either the signature or the endorsement; this is the responsibility of the issuer. Credit union share drafts are also payable-through-draft instruments, usually cleared by a correspondent bank.

  1. Acceptance

    A contractual agreement on a time draft or sight draft to pay ...
  2. Correspondent

    The name given to a bank, broker, dealer, or financial institution ...
  3. Bank Draft

    A type of check where the payment is guaranteed to be available ...
  4. Bounced Check

    A slang word for a check that cannot be processed because the ...
  5. Negotiable

    1. Describing the price of a good or security that is not firmly ...
  6. Share Draft

    A type of draft used in credit unions as a way to access funds ...
Related Articles
  1. Credit & Loans

    The Evolution Of Banking

    Banks are a part of ancient history. Find out how this system of money management developed into what we know today.
  2. Insurance

    Your First Checking Account

    This owner's manual will show you what to expect from your bank.
  3. Personal Finance

    Opening Your Child's First Bank Account

    Teach your children to save up to meet their spending - and saving - goals.
  4. Options & Futures

    Demystification Of Bank Accounts

    Find out which type of account suits your specific needs.
  5. Insurance

    Avoiding The Modified Endowment Contract Trap

    To avoid MEC status, flexible-premium policies must cap the amount that can be paid into the policy over a period of seven years.
  6. Economics

    Federal Deposit Insurance Corporation (FDIC)

    The Federal Deposit Insurance Corporation (FDIC) insures deposits in banks and thrift institutions.
  7. Economics

    How Does Reinsurance Work?

    Reinsurance is a practice in which insurers transfer portions of portfolios to other parties in order to reduce their exposure to claims.
  8. Insurance

    Understanding Insurance Claims

    An insurance claim is a formal request made to an insurance company that asks for a payment based on the terms of the policy.
  9. Insurance

    How To Read a Permanent Life Insurance Illustration

    To help you understand your life insurance policy, companies provide a permanent life insurance illustration. Here is how to read and understand it.
  10. Taxes

    Tips for Reducing Health Insurance Expenses

    For many self-employed people, health insurance premiums can make up a hefty percentage of their budget. Here are some tips on how to deduct them.
  1. Are all bank accounts insured by the FDIC?

    The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the U.S. government that protects you against ... Read Full Answer >>
  2. Does renters insurance cover personal injuries?

    Renters insurance provides two main forms of coverage – liability and contents insurance – and they are offered together ... Read Full Answer >>
  3. Does renters insurance cover jewelry?

    Renters insurance provides personal property coverage that covers your personal property – including jewelry – in case of ... Read Full Answer >>
  4. Why might landlords require renters insurance?

    Landlords can require renters insurance to lower their own liability and insurance costs. According to data from the Insurance ... Read Full Answer >>
  5. What is the expense ratio in the insurance industry?

    The expense ratio in the insurance industry is a measure of profitability calculated by dividing the expenses associated ... Read Full Answer >>
  6. What is the difference between a peril and a hazard?

    The two related terms "peril" and "hazard" are often used in reference to the insurance industry. Essentially, a peril is ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  2. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  5. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  6. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
Trading Center