Where to get demand draft

The name of the person or party who the demand draft is to be paid to is mentioned on the DD. This person or party who receives the demand draft is called payee.

The money through this demand draft can only be transferred to the payee and no other person can receive this DD. A sight demand draft is only approved after the payee presents certain documents asked by the bank. If the payee fails to do so, the draft is not paid. A time demand draft is only payable after a specific period of time. You cannot draw this demand draft from the bank before that time.

So, while dealing with an unknown party, asking for a demand draft is always a better option. Products IT. About us Help Center. Log In Where do you want to login? Sign Up. Income Tax Filing. Expert Assisted Services. Tax Saving. Mutual Fund Investments. GST Software. TaxCloud Direct Tax Software. Develop and improve products. List of Partners vendors. A demand draft is a method used by an individual to make a transfer payment from one bank account to another.

Demand drafts differ from regular normal checks in that they do not require signatures to be cashed. In , due to the increasing fraudulent use of demand drafts, the Federal Reserve proposed new regulations increasing a victim's right to claim a refund and holding banks more accountable for cashing fraudulent checks. When a bank prepares a demand draft, the amount of the draft is taken from the account of the customer requesting the draft and is transferred to an account at another bank.

The drawer is the person requesting the demand draft ; the bank paying the money is the drawee ; the party receiving the money is the payee. Demand drafts were originally designed to benefit legitimate telemarketers who needed to withdraw funds from customer checking accounts using their bank account numbers and bank routing numbers.

For example, if a small business owner purchases products from another company on credit, the small business owner asks his bank to send a demand draft to the company for payment of the products, making him the drawer. The bank issues the draft, making it the drawee. After the draft matures, the owner of the other company brings the demand draft to his bank and collects his payment, making him the payee. A demand draft is issued by a bank while a check is issued by an individual.

Also, a demand draft is drawn by an employee of a bank while a check is drawn by a customer of a bank. Payment of a demand draft may not be stopped by the drawer as it may with a check. Because a demand draft is a prepaid instrument, payment cannot be stopped, whereas payment of a check may be denied for insufficient funds.

Although a check can be hand-delivered, this is not the case with a demand draft. The draft may be drawn regardless of whether an individual holds an account at the bank while a check may be written only by an account holder. Board of Governors of the Federal Reserve System. Accessed Sep. Checking Accounts. Your Privacy Rights. To change or withdraw your consent choices for Investopedia.

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