How to Encash Demand Draft
- The person who receives the demand draft has to present the draft to his/her bank branch.
- The bank asks for specific documents to initiate the payment procedure.
- Once the documents are verified, the amount is transferred to the bank account of the individual.
What is the maximum DD amount?
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| Demand Draft Amount | Demand Draft Charges |
|---|---|
| Up to Rs. 5,000 | Rs. 25 |
| Rs. 5,000 to Rs. 10,000 | Rs. 50 |
| Rs. 10,000 to Rs. 1 lakh | Rs. 5 per thousand or part thereof. (Minimum Rs. 60) |
| Above Rs. 1 lakh | Rs. 4 per thousand or part thereof. (Minimum Rs. 600 and maximum Rs. 2,000) |
What is the meaning of a demand draft?
Demand Draft. The meaning of negotiable instrument is that it guarantees a certain amount of payment mentioning the name of the payee. It cannot be transferred to another person in any situation. The bank issues the draft to a client (drawer) directing another bank or own branch to pay the specific amount to the payee.
Which is the best way to encash a demand draft?
Demand Draft 1 The instrument directs other bank or branch to pay a specific sum of money stated in the draft to the payee (beneficiary) 2 Contrary to the cheques, demand drafts are pre-paid instruments 3 The drawer has to first transfer money to the bank to issue a demand draft.
Can a demand draft be transferred to another person?
It cannot be transferred to another person in any situation. The bank issues the draft to a client (drawer) directing another bank or own branch to pay the specific amount to the payee. Demand drafts can be compared to cheques but these are hard to counterfeit and more secure.
Do you have to be account holder to use demand draft?
Further, it is not necessary that the person who applied for demand draft, should be an account holder of the bank, rather any person can fill the DD form, and pay the concerned charges either through cash or cheque, to get it. DD’s are generally used when one has to make payment in another city and it can be cleared at any branch of the same bank.
