Payable Through Draft

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Correspondent

    The name given to a bank, broker, dealer, or financial institution ...
  2. Negotiable

    1. Describing the price of a good or security that is not firmly ...
  3. Bounced Check

    A slang word for a check that cannot be processed because the ...
  4. Bank Draft

    A type of check where the payment is guaranteed to be available ...
  5. Acceptance

    A contractual agreement on a time draft or sight draft to pay ...
  6. Share Draft

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

    The Evolution Of Banking

  2. Your First Checking Account
    Insurance

    Your First Checking Account

  3. Opening Your Child's First Bank Account
    Personal Finance

    Opening Your Child's First Bank Account

  4. Demystification Of Bank Accounts
    Options & Futures

    Demystification Of Bank Accounts

Hot Definitions
  1. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  2. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  3. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  4. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  5. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  6. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
Trading Center