Difference between a Cheque and Draft - General Knowledge Today

Difference between a Cheque and Draft

ChequeA cheque is also a Bill of ExchangeRegulated market place where capital market products are bought and sold through intermediaries. There are 3 parties in the bill of Exchange. BEO is a written negotiable Instrument which contains an unconditional order which is Signed by ..... A cheque is a bill of exchange in which one party (Drawee) is a Bank. So a Drawer ..... has been defined in Negotiable Instruments Act 1881Negotiable Instruments Act 1881 had been passed in 1882 and was modified in 1989 and 2002, as some more sections were added into the age ..... section 6. A cheque is a bill of exchange drawn on a specified bank and not expressed to be payable otherwise than on demand.

A demand draftDemand draft is discussed in section 85(A) of the NI Act. A Demand draft is an order to pay money drawn at one office ..... has been defined by Negotiable Instruments Act 1881 in section 85. A demand draft 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:

  • A cheque can be made payable to bearer but a Demand Draft cannot.
  • A demand draft can be cleared in a specified branch of the issuer bank
  • A cheque can get dishonored but Demand draft is always honored.
  • An issuer party of the cheque is liable to the cheque and not backed by a Bank Guarantee, A demand draft is backed by a bank guarantee
Last Updated: November 22, 2013



  1. BEEGAM NIZA A says:

    Is dd should taken from the same bank?
    is there is any time period for sanctioning this dd?