Difference between Normal cheque and Bank Draft or Banker Cheque or DD

Difference between Normal cheque and Bank Draft or Banker Cheque or DD

A normal cheque is a written order from an account holder directing their bank to pay a specified amount to the named recipient. It's subject to clearance and can bounce if funds are insufficient.

In contrast, a bank draft or banker's cheque (also known as a Demand Draft or DD) is a prepaid instrument issued by a bank, guaranteeing payment to the beneficiary. Unlike normal cheques, bank drafts are more secure as they are backed by the bank, ensuring that the recipient receives the specified funds without the risk of bouncing. DDs are often used in transactions where trust is critical, offering greater security and reliability than personal cheques.

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