Question

what is the difference between a cheque and a demand draft?​

Answer 1

An official bank cheque is a financial payment method conducted through bank which can be withdrawn by the payee from the particular bank of the payer based upon official approval signified by the official signature of the payer and the respective bank.

A demand draft is usually a negotiable payment method which involves transfer of funds from one bank account to the other.

Explanation:

Major difference between cheque and demand draft:-

• Unlike bank cheques,the demand draft payments do not require an official signature of the payer to receive or encash the payment.
• Without the official display or presentation of the bank cheque,the cheque payment cannot be processed but the demand draft can be officially displayed or presented to the bank following the payment processing.
• Demand draft is a prepayment process and therefore cannot be cancelled if the bank account of the payer has an insufficient balance of fund.However,a bank cheque will be automatically dishonored following account balance insufficiency of the payer.
• A cheque can be cancelled even after it is officially issued and procesed at the consent of the payer but demand draft cannot be cancelled once issued officially.
• Usually there is no additional bank charges involved with the issuance of demand draft contingent on its amount,but there is a bank service fee to issue outstation cheques.