What Does a Draft Withdrawal Mean on a Bank Statement?

Bank tellers can often help explain unfamiliar bank statement terms.

Bank tellers can often help explain unfamiliar bank statement terms.

Your monthly bank statement not only indicates the amounts of payments you have made, it also notes the form of payment. If you see "draft withdrawal" or a related term, that means you had an amount withdrawn electronically from your account. This process is common if you set up automatic payments with a vendor, utility or other service provider.

Automatic Payment Examples

If you have companies you make monthly payments to in exchange for certain services, you might set up automatic withdrawals. Some providers offer discounts or incentives to have you do this because it simplifies their process of collecting payments. For these services, you will see monthly draft withdrawals on your bank statement. A draft is similar to the process of a physical check being paid out by your bank, but the money is withdrawn electronically.

 

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