A demand draft (DD) is a financial instrument that functions as a secure payment method. It is commonly used in financial transactions, particularly for larger sums of money. It is issued by banks to transfer money from one bank account to another.
This post covers information on the demand draft meaning, charges, its advantages, disadvantages, and the steps involved in issuing a demand draft.
A demand draft form or DD form is an application that must be filled by the drawer/sender while initiating a transaction from their bank account to the payee’s bank account via demand draft.
It is essential to fill the DD form with all the essential details to initiate the transaction. One can download the demand draft application form online from the official website of their bank or can collect it directly from the respective bank branch.
Here are the details that are present in the demand draft application form and must be filled in by the payer:
To issue a demand draft, one should visit their bank branch and follow the instructions that are provided below:
Generally, the validity of a demand draft ranges from 3 months to 6 months from the date of issuance. However, the demand draft validity period can vary from bank to bank. After the validity period, the demand draft may expire, and you might need to get it reissued or request an extension from the issuing bank.
It is important to check the specific validity period mentioned on the demand draft and make the payment within the mentioned timeframe.
Demand Draft offers several advantages, such as:
Demand drafts are a secure way to make payments. However, there are certain risks associated with demand drafts. Here are some of the disadvantages of demand drafts: