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Difference Between Cheque and Demand Draft

What is the Difference Between Cheque and Demand Draft?

Difference Between Cheque and Demand Draft : Do you know the difference between Cheque and Demand Draft? If you deal in money transactions through a bank, you should know the difference between cheque and demand draft. Demand draft and check are two financial instruments associated with the banking sector, often used to transfer and encash money in the banking system. (हिन्दी के लिए यहा क्लिक करे।)

But do you know that both demand draft and check are different from each other? If not, it doesn’t matter. Through this article, information will be given about the difference between demand draft and cheque. For complete information about the difference between Demand Draft and Cheque, read this post till the end.

Demand Draft And Cheque

A demand draft is a type of negotiable instrument signed by the drawer, which contains the guidelines for the Bank to transfer a specified amount of money to a particular person.

A cheque is also a negotiable instrument, but it can make full payment according to the demand.

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What is the Difference Between Cheque And Demand Draft ?

Demand draft and check are both negotiable instruments through which payment is made. Following are the main difference between cheque and demand draft.

  • A demand draft can never be dishonoured, as the amount transferred through a demand draft is already given to the Bank. Conversely, a check may bounce if you do not have sufficient funds in your account or if the check issued by you has been made stop payment.
  • The bank account holder issues the check through a cheque book issued by the Bank, whereas the Bank issues the demand draft after the account holder’s acceptance.
  • Demand draft can be executed from any bank by both the account holder of the Bank or the one who does not have a bank account, whereas a check can be issued by the account holder only.
  • Stop payment can be made to a check issued by a bank account holder but stop payment cannot be made when a demand draft is issued.
  • No special fee is levied on the issue of cheque book by the Bank, whereas on-demand draft, bank fee is charged according to the demand draft.
  • In making payment through Demand Draft, only two parties are involved as drawer and payee, whereas in making payment through cheque, three parties are involved in a drawer, drawee and payee etc.

Generally above mentioned difference between cheque and demand draft are found. 

FAQs Related Difference Between Cheque and Demand Draft 

Q-1. Can money be sent abroad through demand draft?

Yes, money can be sent through demand draft in India and abroad because demand draft can be issued in a foreign currency other than Indian currency.

Q-2. Can a Demand Draft be cancelled like a cheque?

No, Demand Draft can never be 20 Honor as the amount to be paid through Demand Draft is already made available to the Bank by the person issuing the Demand Draft. At the same time, this does not happen at the time of issuance of a cheque. Bounces can happen due to insufficient balance in the checking account and stop payment.

Q-3. What are the fees charged by the Bank while issuing the demand draft?

The fee charged for the issue of Demand Draft may vary from Bank to Bank; there is no fixed formula for this.

Q-4. Can a person get the demand draft cancelled?

Yes, the demand draft issued by the Bank can be cancelled, but the person issuing the demand draft must give a written application to the Bank along with the original demand draft.

Read Also : – How to Convert Credit Card Payment to EMI in HDFC

Guru
Guruhttps://paisaproblem.com/
I am student and part time blogger. I am interest to share my views on financial issues.
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