With the increase of digital technology and smart phones, the payments solutions of banking have also altered considerably over the years. Digital payment systems enable all citizens to participate in the expansion and improvement of technology in a high range. There are different types of negotiable instruments are used within the banks that assures the payments of a specific amount of money. However, the place of these negotiable instruments is replaced by digital mechanism nowadays. A demand draft is a negotiable tool related to a bill of exchange. It can also be contrasted to a cheque. People will make use of this demand draft for many applications like exams, jobs, admissions, high amount purchases and even more. The demand draft cannot be discredited as like cheques. This article helps you to be aware of what is demand draft, what are its considerable functions and its importance in a clear manner.
The demand draft is payable on a particular branch of a bank at a precise centre. It is accepted for transactions and guaranteed for transfer of money even when payee and drawer are unknown. Demand draft is issued by a bank whereas a cheque is issued by a person. Payment of the demand draft cannot be stopped by the drawer as it is a prepaid tool. In addition, a demand draft cannot be hand distributed as like a cheque. In order to get disbursement, the beneficiary can collect it by the bank during the clearing instrument. Further, you can present the instrument openly to the concerned branch for obtaining payment. Due to the progress of immense digital payments, lots of individuals are not conscious of what is demand draft and so they did not know about the applications of this negotiable tool. It is solely good to understand more about the demand draft to make use of it at the right time.