ABHISHEK GHOSH

What's New?

SPEEDY Railway Book (English)

Details about Cheque vs. Demand Draft (DD)

"CHEQUE VS. DEMAND DRAFT"
For SBI PO-IBPS PO/ Clerk-RRBs

CHEQUE:
As per Section 6A cheque is a 1. Drawn on specified bank, 2. Bill of exchange and 3. Not expressed to be payable otherwise than on demand. It includes electronic image of a truncated cheque and also an electronic cheque.

Parties to a cheque are drawer (the account holder), Drawee (the bank with whom the account is maintained) and payee (the person named in the cheque). The other parties also come into picture subsequently and include endorser and endorsee. Drawee of a cheque can be a bank only.

Demand Draft (DD):
A demand draft is an instrument used for resulting transfer of money. It is a Negotiable Instrument. Cheque and Demand-Draft both are used for Transfer of money. You can 100% trust a DD. It is a banker's check. A check may be dishonored for deficiency of funds a Demand Draft cannot. Cheque is written by an individual and Demand draft is issued by a bank. People believe banks more than individuals.


Difference between Cheque and Demand Draft:

Sl. No.
Cheque
Demand Draft (DD)
1.       
It is issued by individual
It is issued by a bank
2.       
Drawer and Drawee are different persons, can be same also if cheque is drawn on self
Drawer and Drawee are same bank with different branches
3.       
It is defined in the Negotiable Instrument Act, 1881
Although a type of Negotiable instrument only, it is not defined in the Act.
4.       
There are no bank charge to issue a cheque
Different banks can charge differently for the issue of demand draft
5.       
Payment is made after presenting cheque for encashing
Payment is paid before presenting demand draft for encashing
6.       
In case of insufficient balance in the account, it can be dishonored
It cannot be dishonored because payment is already done for it.
7.       
Individual or Party issuing cheque must have a savings or current account in the bank
Individual or Party getting issued a demand draft may not be necessarily have bank account in the bank.
8.       
It requires a signature of individual or party
It requires a signature of banking authority and stamp of bank
banner
Join Your Competitor in FB Groups
Join Your Competitor in Telegram Groups
Study Materials and Important Notifications
Latest Govt. Schemes Monthly PDF Download
Newsletters Form

  • Comments
  • Google+
  • Disqus