what is the difference between demand draft and banker's cheque


Sometimes you might need to get a demand draft (DD) issued for someone. On certain occasions you may get a Bankers cheque instead. Demand Drafts and Bankers Cheques are almost the same. In both cases, you pay the money in advance to get this. Or money is taken from your account for this reason. So you may consider both as something a pre-paid stuff. Unlike with ordinary cheques, here the amount is assured by bank. There is no fear of something being dis-honoured. Now, the difference. When you give the DD to someone, he/she tries to get it encashed or deposited to account. If the account is in a branch of same bank, (e.g. you gave a Citibank demand draft and the receiving person also has Citibank account) it gets cleared in that branch itself. So finally the Demand Draft gets cleared in any branch of the issuing bank. Bankers Cheque goes the same way until the clearance part. Bankers Cheque is to be cleared in the very specific branch of the bank that issued it. That is, if the Bankers Cheque is issued at Bangalore branch of Citibank, it will finally get cleared inBangalore branch. But this is not the users worry. Bank takes care of it once you submit the cheque to any of their branches. So you can safely use a Bankers cheque instead of a Demand draft if needed.

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