A bank draft is the most secure form of payment for large transactions in Canada because the funds come from the bank itself, not your personal account. When a real estate lawyer asks for a draft payable to their trust account for a property deposit, they want certainty the cheque will clear — and a bank draft provides that guarantee by making the issuing bank the payer. The process requires visiting a branch in person, takes 15–30 minutes, and costs $7.50–$10 at most banks. If you have a premium chequing account, the fee is often waived.
The key practical constraint is that bank drafts are physical documents that cannot be issued remotely. This means you need to plan ahead: visit the branch during business hours, bring photo ID, and know the exact payee name and amount in advance. The payee name cannot be corrected after issuance without returning to the branch — a common and avoidable error when drafts are used for real estate closings where the exact lawyer trust account name matters.
Bank Draft Fees by Bank (2026)
| Bank | Bank Draft Fee | Certified Cheque Fee | Free With Account Tier |
|---|---|---|---|
| RBC | $8.50 | $15.00 | VIP Banking ($16.95/mo) |
| TD | $7.50 | $15.00 | All-Inclusive ($16.95/mo) |
| Scotiabank | $8.75 | $15.00 | Ultimate Package ($16.95/mo) |
| BMO | $8.50 | $15.00 | Premium Plan ($16.95/mo) |
| CIBC | $7.50 | $10.00 | Smart Premium ($16.95/mo) |
| National Bank | $8.00 | $12.50 | Premium account |
| Desjardins | $7.50 | $12.00 | Premium package |
Most premium chequing accounts at the major banks include free bank drafts as a built-in benefit. If you are getting a bank draft for a major transaction (real estate, vehicle purchase), it is worth checking whether your current account tier includes this — the account upgrade that includes free drafts is often only a few dollars more per month than a standard account, and real estate closings typically require two or more drafts. See bank fees comparison for a full account-by-account breakdown.
How to Get a Bank Draft: Step by Step
Getting a bank draft is straightforward but requires an in-person branch visit. There are no online or telephone alternatives at any major Canadian bank.
Step 1: Confirm the exact payee name and amount. For real estate closings, call your lawyer before visiting the bank to get the precise trust account name. The payee name must be identical to what the recipient expects — “Smith & Jones LLP in Trust” and “Smith and Jones Law in Trust” are different payees and will create problems. Confirm the amount as well; any difference requires a branch correction visit.
Step 2: Visit your bank branch during business hours. Bring government-issued photo ID — a driver’s licence or passport. You do not need to book an appointment; bank drafts are handled at the teller window.
Step 3: Provide the payee name, amount, and authorize the withdrawal. The bank withdraws the funds from your chequing or savings account immediately. The draft is drawn on the bank’s own funds from this point forward — your account is debited and the bank becomes the payer.
Step 4: Receive the physical bank draft. Treat it like cash. The draft has no recourse mechanism once issued to the payee — if it is lost after delivery, recovery is difficult. Keep the receipt the bank gives you; you will need it if the draft must be cancelled or if a stop payment is required.
Processing time: 15–30 minutes at the teller window. Some branches may ask you to wait briefly while the draft is printed and reviewed by a supervisor for large amounts.
Bank Draft vs. Other Payment Methods
| Feature | Bank Draft | Certified Cheque | Wire Transfer | Interac e-Transfer |
|---|---|---|---|---|
| Guaranteed funds | Yes — bank’s funds | Yes — verified funds held | Yes | Yes (up to daily limit) |
| Cost | $7.50–$10 | $10–$15 | $25–$80 | $0–$1.50 |
| Available online | No — branch only | No — branch only | Yes — online banking | Yes |
| Speed | Immediate issuance | Immediate issuance | 1–5 business days | Minutes |
| Maximum amount | Unlimited | Unlimited | Bank-dependent | $3,000–$25,000/day |
| Can be cancelled | Yes — with fee and original | Yes — return original | Very difficult | Before recipient accepts |
| Common use | Real estate, vehicles | Large domestic payments | International, large transfers | Day-to-day, smaller amounts |
| Accepted for real estate deposits | Yes — preferred | Yes | Yes | Sometimes — smaller deposits only |
The main alternative to a bank draft for guaranteed domestic payments is a wire transfer, which can be initiated through online banking and does not require a branch visit. However, wire transfers for domestic use cost $25–$80 — significantly more than a $7.50–$10 bank draft — and take 1–5 business days to process rather than being instantly issued. For real estate deposits and vehicle purchases where the recipient needs a physical instrument, a bank draft remains the standard.
For international payments, a wire transfer or an online money transfer service is more practical because bank drafts must be physically delivered and are denominated in Canadian dollars. For smaller guaranteed amounts under $1,000, a money order is available at Canada Post and many credit unions, often at lower cost.
When to Use a Bank Draft
| Situation | Recommended Method | Reason |
|---|---|---|
| Real estate deposit ($25,000–$100,000+) | Bank draft | Required or preferred by real estate lawyers |
| Real estate closing funds | Bank draft | Lawyer trust accounts require guaranteed funds |
| Private vehicle purchase | Bank draft | Seller confidence; proof of payment |
| Tuition payment ($5,000–$30,000) | Bank draft or EFT | Post-secondary institutions accept both |
| Landlord deposit (first/last month) | Bank draft or certified cheque | Demonstrates financial credibility |
| Government fees (immigration, licensing) | Bank draft | Often explicitly required |
| Large brokerage deposit ($50,000+) | Wire transfer | Fastest electronic delivery to investment accounts |
| Amounts under daily e-Transfer limit | Interac e-Transfer | No branch visit required |
Real estate closings are the most common reason Canadians need bank drafts. A typical residential purchase requires two: one for the deposit (paid when the offer is accepted, often 5% of the purchase price) and one for the balance of the down payment and closing costs at the closing date. For a $700,000 home with a 20% down payment, this could mean a $35,000 draft at deposit and a $105,000+ draft at closing — both drawn on your account at the time the bank prepares them.
Cancelling a Bank Draft
Bank drafts are designed to be difficult to cancel because their security value comes from being unconditional. Cancellation is possible but not guaranteed:
| Scenario | Process | Fee | Timeline |
|---|---|---|---|
| Draft not yet cashed — original in hand | Return original to branch; request stop payment | $15–$25 | Refund in 1–2 business days |
| Draft lost or stolen | Request stop payment + sign indemnity bond | $25–$50 plus bond premium | 90-day waiting period typical |
| Draft issued with wrong payee or amount | Return to branch for reissue | May incur new draft fee | Same day |
| Draft already cashed by payee | Cannot cancel | Not applicable | Not applicable |
If you suspect a bank draft has been lost or stolen, report it to your branch immediately. The sooner a stop payment is placed, the lower the risk of the draft being fraudulently cashed. Waiting until after the draft is presented defeats the purpose of the stop payment.
Protecting Yourself from Bank Draft Fraud
Bank draft fraud is a known risk in private sale transactions. A fraudster presents a convincing but counterfeit bank draft, receives goods or property, and disappears. The draft later bounces when the recipient’s bank discovers it is fake — at which point the bank reverses the deposit and the recipient has lost both the goods and the funds.
To verify a bank draft before releasing anything of value: call the issuing bank directly using the phone number from the bank’s official website (not any number printed on the draft), and provide the draft’s serial number, amount, and payee name. The bank can confirm whether the instrument is genuine. Never rely on visual inspection alone — sophisticated forgeries are indistinguishable from genuine drafts to the untrained eye. Never release goods until your bank has confirmed the draft as cleared funds in your account, not just as “deposited.”