Difference between Cheque vs Demand Draft (DD)

Let us understand the definition of Cheque and Demand Draft to have clear idea.

According to Section 6 of the Negotiable Instruments Act, “Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand”.

Although Demand Draft is a pre-paid Negotiable Instrument, it is not defined under the act. Demand Draft is popularly known as DD in Banking Jargon. Demand Draft means an instrument drawn by one branch of a bank upon another branch of the same bank instructing the later to pay a certain sum of money to the person named therein or to his order.

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Difference between Cheque vs Bill of Exchange

Before analyzing the difference between Cheque and Bill of Exchange, let us understand the definition of both the terms to show some light on it.

According to Section 6 of the Negotiable Instruments Act, “Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand”.

According to Section 5 of the Negotiable Instruments Act, “Bill of Exchange is an instrument in writing containing an unconditional order, signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument”.

Below are the distinguish / difference between Cheque vs Bill of Exchange to understand more about these features of Cheque and Bill of Exchange:

Difference Between Cheque vs Bill of Exchange Subramoneyplanning.blogspot.com

Hope this will be clear enough to see the distinguish / difference between Cheque vs Bill of Exchange.

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Features of a Cheque

As we know that Cheques are reliable, convenient, and widely accepted by businesses (although proper identification may be required). There so many features of a Cheque.

The following are the important features of a cheque:

   # It is an negotiable instrument in writing. It may be hand written by ink or typed or printed but writing in pencil is not allowed.

   # No stipulatory conditions should be there (i.e., an unconditional order)

   # A Cheque must be drawn on specified bankers only. A cheque contains

the name of the bank and place of the branch.

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