Bank Cheque Vs Demand Draft: When it comes to cashless transactions, cheques and demand drafts (DD) are definitely mentioned. Cheques are used extensively, but DD is the only way to make transactions for certain tasks. Bank cheques and DD may look somewhat similar in view, but there is little difference between both the use and the transaction method. At the same time, one of them is also considered to be more secure than the other.
Dd is also used to send money to a bank account as a cheque. Demand drafts can be built in any bank. The main thing is that it is not necessary to have a bank account to build a DD. The person or company you are making a DD in the name of the money travels directly to the account. A DD can either be cached or cut off from your account when you build it from a bank with the presence of your account.
Major differences between Checks and DD
DD is only in the account. The name in which it is created can be encashed from your account. The cheque can be issued for depositing money into the account or for direct in cash by the bearer without depositing the money.
If there is not enough money in the bank account, the cheque bounces. But there is no hassle of the DD bouncing because the person who made the DD has already made the payment.
The cheque can only be issued by those who have an account with the bank but do not have an account in the bank to get a DD.
Sometimes it takes several days for funds to be transferred from standard cheques. While dd’s unmount takes a working day to reach the targeted account.
DD Considered More Secure
If the cheque account is not paid and lost, it has the chance of being misused. Any person can become a bearer and make it into cash. But that’s not the case with DD. It only makes a payment in a bank account, so it cannot be encashed if it is lost. Yes, it can be canceled in case of loss. According to the Reserve Bank’s rule, it is mandatory to print the buyer’s name on the DD. The rule comes into effect from September 15, 2018, to thwart money laundering efforts.
In whose name the DD is payable, it has to give a reason for the DD to be built to get in cash from the unmounted bank account of the DD. The documents for which the unmount is being transferred from dd will have to be displayed in the bank. Only then will the DD in cash.
The big work in these activities is DD
Bank DD is a good tool for large and international transactions. Dd is used as a means of fee transfer for most educational institutions and many jobs. DD can be built in any currency in the world if needed other than Rs.