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Foreign Drafts Explained! What Are They and Why You Use Them

In Business and Currency by Continental StaffLeave a Comment

As you may or may not know, Continental’s services include foreign drafts. You might be wondering exactly ‘what are foreign drafts?’ and ‘what are the reasons to use them?’. Read on for more information!

First of all, let’s start with some definitions. A foreign draft is a bank draft drawn as an alternative to foreign currency. Foreign drafts can be purchased in one country and used as payment in another. Many people are more familiar with foreign cheques. While similar, there are slight differences. A foreign cheque is just like a regular cheque – only issued in a foreign currency. The biggest difference between a draft and a cheque is when the payment is drawn. With a cheque, the payment is drawn after the recipient takes it to the bank. Whereas with a draft, payment is settled prior to presenting it to the recipient.

When To Use Foreign Drafts

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Foreign drafts are used to send money to a different country. They are generally safer, faster (since they require less information and save on bank delays), and more affordable (since exchange fees are mitigated) than sending cash. Since there’s no chance of foreign drafts bouncing like a cheque, it’s a good idea to use drafts for more important payments and bills. This can include paying your international mortgage or purchasing a car.

Foreign drafts don’t just have to be sent to a foreign country though – you can bring them with you on your travels to compliment the cash you bring. You can use your foreign draft to pay for something or cash it in once you get there and need it.

Other Reasons To Use Foreign Drafts

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  • Paying international credit card, phone, or other bills
  • Paying tuition and student fees
  • Sending remittances to loved ones
  • Buying overseas real estate, cars, boats, or other big ticket items
  • Maintaining overseas real estate and property

Please note: Continental no longer issues EUR or GBP foreign drafts due to complications depositing them overseas. To save you time and energy, we’re happy to send wires instead! 

Learn more about foreign drafts and cheques HERE and HERE or visit one of our branches today!

Stay Informed. Stay Current.