Cheque vs Demand Draft: Difference between Cheque and Demand Draft

Cheque vs Demand Draft. Difference between Cheque and Demand Draft.

Cheque: Cheque is a negotiable instrument instructing a Bank to pay a specific amount from a specified account held in the maker/depositor’s name with that Bank.

Difference-Between-Cheque-And-Demand-Draft-DDDemand Draft (DD): A demand draft is an instrument used for effecting transfer of money. It is a Negotiable Instrument.

The following are the main differences between a cheque and a demand draft:

  •  A cheque is issued by an individual, whereas a demand draft is issued by a bank.
  • A cheque is drawn by an account holder of a bank, whereas a draft is drawn by one branch of a bank on another branch of the same bank.
  • In a cheque, the drawer and the drawee are different persons. But in a draft both the drawer and the drawee are the same bank.
  • A cheque is defined in the Negotiable Instrument Act, 1881, whereas a demand draft has not be precisely defined in the NI Act.
  • A Cheque can be dishonored for want of sufficient balance in the account. Whereas a draft cannot be dishonoured. Hence there is certainty of the payment in the case of a demand draft.
  • Payment of a cheque can be stopped by the drawer of the cheque, whereas, the payment of a draft cannot be stopped.
  • A cheque can be made payable either to a bearer or order. But a demand draft is always payable to order of a certain person.

5 thoughts on “Cheque vs Demand Draft: Difference between Cheque and Demand Draft

  1. Good Info :-)

  2. (Y) Thumbs up!

  3. It’s truely helpful.

  4. wanderful info, much helpful for bank aspirants

  5. helped a lot

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