A money-market instrument used to finance international and domestic trade. It is a check drawn on a bank by an importer or exporter of goods repre- senting the bank's unconditional promise to pay the face amount of the note at maturity.
A draft drawn on a specific bank by a seller of goods to obtain payment of goods that have been sold to a customer. The customer maintains an account with that specific bank.
A draft or bill or exchanges accepted by a bank or trust company. The accepting institution guarantees payment of the bills, as well as the issuer.
A draft or bill of exchange accepted by a bank to guarantee payment of the bill.
A money market instrument representing time drafts drawn on and accepted by a banking institution, which in effect adds its credit to that of the importer or holder of merchandise.
A time draft drawn on and accepted by a bank. Once accepted, the draft becomes a primary obligation of the accepting bank to pay at maturity. Compare "Acceptance."
An order to pay a specified amount of money to the holder on a specified future date. The bank that accepts this draft assumes responsibility to make payment on the draft at maturity. BAs are usually created to finance the storage or shipment of foreign or domestic goods.
A bankers' acceptance starts as an order to a bank by a bank's customer to pay a sum of money at a future date, typically within six months. At this stage, it is like a postdated check. When the bank endorses the order for payment as "accepted", it assumes responsibility for ultimate payment to the holder of the acceptance.