when you request a bank draft the bank ensures you have enough money in your account to cover the amount requested it then withdraws the money from your account and moves it to the bank s reserve account 
the bank then prepares the draft with your name and the amount you are paying the third party the payee the draft has a serial number watermarks and may even have micro encoding that identifies it as a legitimate form of payment since the funds are already withdrawn from your account when you buy the draft the issuing bank essentially becomes the payer bank drafts may be required by a seller when they have no relationship with a buyer when a transaction involves a large sum or if the seller believes collecting payment may be difficult banks normally charge customers for drafts this means that in addition to the amount of the draft the requesting customer may be liable for a fee usually a flat fee based on the total amount of the draft or a percentage of the draft banks may waive the fee for customers who have a good relationship with the institution or for those who are considered high net worth individuals hnwis 1