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Explanation 1:

A Demand Draft is a banking instrument . In any case, if it is not crossed, it is bearer, meaning thereby that the bearer, anyone who is presenting it to the bank can get it en cashed . However, if we cross it, it is two parallel lines on the DD's top left, it becomes crossed . It means that the benefit of that DD can be taken only after getting it credited to the addressee's account only. By crossing the bearer ship goes, so the one who has signed the cheque or given the DD is very sure that it goes to the particular person and the particular person can be traced because it first went to his/her account . That is why a crossed draft is also chalked "Account payee only".

Explanation 2:

If you cross a bank draft only an account holder can en cash the same. It is generally safer than the normal bank draft.

Assume you take a draft for 100 dollars in favour of Mr. ABCD. If you don't cross it, Mr. ABCD can en cash it without having a bank account. However if you cross it the money will go only to a bank account. So at any point of time you can prove that you had indeed paid to Mr. ABCD. Another added benefit is in case the draft is lost, any body with the same name can claim the cash.

Thus you get two benefits : Added security as well as a proof.

Q: Can a draft not issued as cross by the issuing bank be crossed later?

A: Yes. Under Section 125 of the NEGOTIABLE INSTRUMENTS ACT, 1881, a holder may cross it.

Further more, such holder may cross generally, specially and also add words "not negotiable".

A demand draft is always an order instrument. The definition of a demand draft under Section 85A of the Indian Negotiable Instrument Act, 1881, makes it clear that a demand draft is an order instrument. In view of this, issue of a demand draft payable to a bearer is STRICTLY PROHIBITED under Section 31 of the Reserve Bank of India Act. If a demand draft is made payable to a bearer it becomes like a currency note and In India only RBI is empowered to issue a currency note. Hence a DD is always made payable to order of a person and no DD is issued payable to bearer.

Crossing is an indication to the banker that it should be paid only through a banker. In other words, cash will not be paid across the counter. The payment will be made through an account of the payee. The main purpose of a crossing is to ensure that the amount of the cheque is paid to the correct payee or endoresee and thus helps in preventing payment to a wrongful person. Thus the purpose of crossing is to ensure safety of the amount. It thus prevents wrongful persons from getting the amout of the cheque.

IF the demand draft is not crossed, payment will be made by the banker subject to proper identification of the payee. If the DD is crossed, the amount of the DD will be credited to the beneficiary's acccount.

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Q: What is the difference between demand draft and crossed demand draft?
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Is crossed demand draft is same as account payee demand draft?

yes


What is the difference between Demand Draft and Bankers Cheque?

A Demand Draft is a banking instrument . In any case, if it is not crossed, it is bearer, meaning thereby that the bearer, anyone who is presenting it to the bank can get it en cashed... Sometimes you might need to get a demand draft (DD) issued for someone. On certain occasions you may get a Banker's cheque instead. Demand Drafts and Banker's Cheques are almost the same.


What is difference between manager's cheque and a demand draft?

manager's cheque is issue by you and bank draft is issue by bank on behalf of the customer And the money is more secured.


What is the procedure for encashment of a crossed demand draft if the drawee has no bank account?

The only way the drawee can get the money is by opening a bank account and then depositing the crossed demand draft into it. The purpose of crossed drafts is to ensure that the money is paid out only into a bank account. So, there is absolutely no way for you to get the money without opening up a bank account. Also, the name in your bank account must match the name on the draft, otherwise the draft will not be encashed.


What is Demand draft in banking?

A Demand Draft is similar to a bank check but with a small difference. In case of a demand draft, the customer pays the money upfront to the bank along with a small fee so that the bank can issue the draft for the mentioned amount. The draft is equivalent to cash and can be converted to cash by the person to whom it is issued. This way, the person who gets the draft can be sure that he will get paid 100% of the money due him.

Related questions

Is crossed demand draft is same as account payee demand draft?

yes


What is the difference between Demand Draft and Bankers Cheque?

A Demand Draft is a banking instrument . In any case, if it is not crossed, it is bearer, meaning thereby that the bearer, anyone who is presenting it to the bank can get it en cashed... Sometimes you might need to get a demand draft (DD) issued for someone. On certain occasions you may get a Banker's cheque instead. Demand Drafts and Banker's Cheques are almost the same.


What is demand draft?

Demand Draft is used by individuals to make transfer payments from one bank account to another. Demand Drafts are marketed as a relatively secure way of cashing checks. The difference between a Demand Draft and a Normal Draft is that a Demand Draft do not require a signature in order to be cashed.


What is difference between manager's cheque and a demand draft?

manager's cheque is issue by you and bank draft is issue by bank on behalf of the customer And the money is more secured.


What is the procedure for encashment of a crossed demand draft if the drawee has no bank account?

The only way the drawee can get the money is by opening a bank account and then depositing the crossed demand draft into it. The purpose of crossed drafts is to ensure that the money is paid out only into a bank account. So, there is absolutely no way for you to get the money without opening up a bank account. Also, the name in your bank account must match the name on the draft, otherwise the draft will not be encashed.


Show you the sample of demand draft with demand draft number?

I'm unable to show images as I am a text-based assistant. However, a demand draft typically includes the DD number at the top right corner of the document, along with details such as the issuing bank's name and branch, payee details, date, and the amount specified. The DD number serves as a unique identifier for the transaction.


What is meant by demand draft?

A demand draft is a monetary instrument that can be considered as equivalent to cash. It is similar to a cheque but with a difference that it is fully safe because the drawer of the draft has to make the payment in order to get the draft. So, the receiver of the draft can be sure that he will get paid for the draft. That is why most schools and colleges expect payment via demand draft for their exam fees, admission fees etc.


Show a demand draft with a demand draft number?

which one is the dd number on a demand draft


What is the meaning of demand draft and normal draft?

is any future of demand draft


Is there a difference between draft and draught?

No, there is no difference, draught is pronounced draft so people confuse it with that.


How can you find the DD in Demand Draft?

A DD refers to a Demand Draft. Can you explain on what exactly you want to find in a Demand Draft?


What is bankers name in a demand draft?

The bankers name in a demand draft is the name of the bank from where u purchased the demand draft.