What is the difference between a Demand draft and a Cheque?

A cheque is a bill of exchange drawn on a specified bank and not expressed to be payable otherwise than on demand. A demand draft (DD) is an order to pay money drawn by one office of a bank upon another office of the same bank bank for a sum of money payable to order on demand. Following are some more differences: Key Differences Between Cheque and DD: 1. Cheque is payable either to order or bearer whereas Demand Draft is always payable to the order of a certain person. 2. Cheques can be dishonoured due to insufficient balance, whereas dishonour is not possible in case of DD due to pre-payment of the amount. 3. Cheques are issued by the customers of the bank while the bank itself issues the DD. 4. Cheque book facility is available only to the account holders of the bank, but DD facility is available to both the account holders and non-account holders. 5. The purpose of the cheque is to make payment in a safe and easy mode while the purpose of the DD is to transfer money from one place to another. 6. In cheque payment is made after presenting cheque to bank, while in DD is given after making payment to bank. 7. Payment of cheque can be stopped by drawee, whereas payment cannot be stopped in DD. 8. In cheque drawer and payee are different person. In DD, both parties are banks. 9. A cheque needs signature to transfer amount, While DD does not require signature to transfer funds. read less