Difference Between Banker’s Cheque (Pay Order) and Demand Draft

Difference Between Banker’s Cheque (Pay Order) and Demand Draft

Definition of bank check (payment order)

The cashier's check or other payment order is a document issued by the Bank on behalf of a customer containing an instruction to pay a specified amount to a specific person within the city. The period of validity of the bank check is 3 months. However, subject to some legal formalities, it may be re-validated.

In bank checks, the chances of dishonor are not possible because the mode is paid in advance. It is always pre-printed with the words "non-negotiable," which means that it can not be negotiated further.

Definition of the demand design

Demand Draft is a tradable instrument issued by the Bank on behalf of a client and containing an instruction to pay a certain amount from one branch to another branch of the same bank to the payee. The period of validity of a draft application is three months, but it can be re-validated against a request. It can never be dishonored because the payment is made in advance. A demand draft of Rs. 20000 or more can only be issued with A / C Payee Crossing.


Differences between bank check (money order) and direct debit

• Bank checks are issued for cash transfers within local limits, while the direct debit draft is issued for transfers of funds by persons resident in two different locations.
• The area of ​​the bank check is limited, while the area of ​​demand design is very large.

• The bank check is pre-printed with the word "non-negotiable". However, this is not the case if it is a demand design.
• A demand draft of Rs. 20000 or more can only be issued with the payee crossing. For bank checks, however, there is no such condition.
• Bank checks can be redeemed at any branch of the bank, provided they are subject to local jurisdiction. However, Demand Draft can be redeemed at any branch of the same bank, regardless of the city.