In our series of Banking Awareness Questions and topics we are providing you more and more important questions which are very helpful for your upcoming interviews and exams.
Question: What is the difference between Cheque and Demand Draft?
Answer: Here is the explanation of this question:
Cheque: Cheuqe is a negotiable instrument which is instructing a bank to pay a certain amount from a certain account kept in the name of the issuer of the cheque, in a bank. The clearance of the Cheque depends on whether sufficient amount is available in the account of the issuer.
Demand Draft: Demand Draft (also known as DD) is an instrument which is prepaid in nature. The Bank by whom the Demand Draft has been issued undertakes the responsibility to make full payment whenever the Instrument is presented for payment. The payment of Draft can not be refused by a bank.