- Cheque is a negotiable instrument instructing a Bank to pay a specific amount from a specified account held in the maker/depositor's name with that Bank.
- A bill of exchange drawn on a specified banker and payable on demand.
- “Written order directing a bank to pay money”.
- Cheque Clearing : This is the process of getting money from the cheque-writer's account into cheque receiver's account.
- Bounced Cheque : When the Bank has not enough funds in the relevant account or the account holder requests that the cheque is bounced then the bank will return the cheque to the account holder. The beneficiary of the cheque have not been paid. This normally incurs a fee from the bank.
Demand Draft
- A demand draft is an instrument used for effecting 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.
Difference Between Cheque and Demand Draft?
- A check may be dishonored for lack of funds a DD can not.
- Cheque is written by an individual and Demand draft is issued by a bank. People believe banks more than individuals.
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