What is the difference between a bank draft and a bank managers cheque?
A bank managers check can be cashed in any bank nationwide. A Bank Draft is a check drawn by one bank against funds deposited into its account at another bank, authorizing the second bank to make payment to the individual named in the draft.
What is the difference between a bank draft and a cheque? Can a bank draft be used to open a bank account?
Both bank drafts and cheques are methods of payment which are are called negotiable instruments . Both have 3 parties. A cheque is drawn by a drawer ( the one who signs the cheque and owes the money) on a drawee ( his bank which holds the drawer's money in an account) and the payee ( to whom the money is owed who is either named as "pay to so-and-so" or may just be a bearer of the cheque. It is thus an instruction ( it never says "please" pay) to his bank to pay a certain sum ( it cannot be goods) to a named person or holder of the cheque. If you have no money or insufficient balance , bank may return the cheque unpaid when it is considered dishonored and usually invites penalties under the Negotiable Instruments Act. The bank draft also has 3 parties but in this case, the drawer and and the drawee are branches of a bank. Thus bank draft is an instruction of branch A to another branch B to pay a certain sum of money to a named person ( it cannot be bearer). As bank draft is a bank instrument it cannot be dishonored ( unless the bank collapses before you have cashed it) and is a safer method of payment. Usually banks are reluctant to open new bank accounts with initial deposit in the form of a cheque or draft to avoid opening an account based on a fraudulent instrument. It is purely a policy decision of each bank. But a bank can more easily establish genuineness of a draft issued by its own branches or cheques from its own customers. All said, with a bank draft you are more certain of the payment coming.
What is difference between cheque and draft?
SECTION 85 A of the N I Act, 1881, defines a bank draft as “ an order to pay money drawn by one of the Office of the bank upon another Office of the same bank for a sum of money payable to order on demand” In other words, a demand draft is an order of one branch to another branch of the same bank to pay that money on deamnd a certain sum of amount to the person named in the draft. In a case, Sugan Chand and Co., vs. Brahmayya, the Madras High Court has ruled that a bank draft is a Bill of Exchange, as it fulfills all the conditions of a BE.The main differences between a draft and a cheque are as follows :1 A cheque can be issued by an individual, a company, partnership firm, etc. A DD is drawn by a bank on its another branch.2. A cheque is drawn by a drawer, whereas the bank DD is drawn by the bank.3. In a cheque transaction, the drawer and the drawee are different persons. But in case of a cheque, the drawer is different and the drawee is different.4. Cheque is used for making payment to another person, whereas, the DD is used to remit money from one place to another place.5. A cheque may be returned for insufficiency of funds. But a DD cannot be returned for insufficiency of funds.6 Payment of a cheque can be countermanded, whereas the payment of a DD cannot be countermanded easily.7. A cheque can be made payable to a person or bearer. A DD cannot be made payable to a person or bearer.M.J. SUBRAMANYAM
What is the difference between bank draft and bank cheque?
A bank cheque is a personal cheque you write from your own cheque book, on your current account. Unless you also have a cheque guarantee card, the recipient takes it on trust that you have enough money in your account, and it won't bounce. A bank draft is a cheque the bank writes for you, payable to whomever you want it to be received by. You pay for it up front with cash (or funds taken from your bank account on the spot by the bank). Because it is already paid for, it is sure not to bounce. You might need a bank draft for many reasons: the recipient may not accept a personal cheque you may not have a current account (perhaps only a savings account, on which you cannot write cheques) you may have no cheques left in your chequebook and are waiting to receive a new one you may have left your chequebook at home and need to write a cheque NOW
What is the difference between a bank draft and SWIFT check?
I need to send a payment via Certified Bank Cheque to a foreign institution. No bank account number has been provided. I read on my bank's website that the payment process upon the beneficiary's receipt of the check can be 2-5 weeks. This seems like an awful long time. A SWIFT check on the other hand seems to be a much faster process. Am I allowed to pay using a SWIFT check? Is this considered a CBC? However, my bank (for some reason) only deals SWIFT cheques for payments to beneficiaries in the US. My payment is going to Denmark. What can I do in this situation?
What's the difference between a bank draft and a check?
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How demand draft is different from cheque?
Demand Draft means the bank’s account may be drafted on demand. It is called a banker’s cheque in the U.S. The bank has already received the funds necessary to clear the draft. Therefore, it is possible, but very rare, to purchase a demand draft on discount. Let’s say you have a demand draft for Rs. 20,00,000.00, drawn on State Bank of India. It doesn’t matter if the person has an account with SBI, or if the account is closed, the person has died, etc. Someone somehow paid SBI Rs. 20,00,000.00 plus fees, to get the demand draft from SBI. Once the SBI printed the draft and gave it to the person who paid the Rs. 20,00,000.00, SBI is now responsible for paying the amount of Rs. 20,00,000.00 against the draft whenever it is presented, regardless of who presents it. SBI is itself being drafted, not the account of the person who paid the Rs. 20,00,000.00 to get the DD. So, there is no question of overdraft.In the case of a cheque, the person writing the cheque and the person depositing the cheque must both have accounts. If the person who wrote the cheque is dead and/or has closed the account, then the person depositing the cheque will get nothing, because the account cannot be drafted. In some cases, it may be possible for a person depositing the cheque to get cash, right away, if there is sufficient money in the account of the person who wrote the cheque. Also, the bank may overdraw the account of the cheque-writer, at times, to make payment against certain types of cheques. However, this is (generally) not guaranteed.The bottom line is this: To pay a cheque, the bank drafts the account of some person or entity other than itself. To pay a DD, the bank drafts its own account. Since a DD is guaranteed (most of the time), a person may use a DD as he or she would use cash.
What's the difference between cheque and demand draft?
Cheque and Demand draft(DD) are negotiable instrument, both are mechanism used to make payments.A cheque is a Bill of Exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.The Demand Draft is a pre-paid Negotiable Instrument, wherein the drawee bank acts as guarantor to make payment in full when the instrument is presented.In business transaction cheque is not usually accepted as the drawer and payee and unknown and there will be credit risk. So, in such cases Demand draft where transfer of money is guaranteed.Here are few basic difference between cheque and DD -1.) Cheque is issued by customer, whereas Demand draft issued by bank2.) In cheque payment is made after presenting cheque to bank, while in DD is given after making payment to bank.3.) Cheque can bounce due to insufficient balance . DD cannot be dishonored as amount is paid before hand.4.) Payment of cheque can be stopped by drawee, whereas payment cannot be stopped in DD.5.) A cheque can be paid to bearer or order. While, DD is paid to person on order.6.) In cheque drawer and payee are different person. In DD, both parties are banks.7.) A cheque needs signature to transfer amount, While DD does not require signature to transfer funds.However, banks do charge certain amount depending on the amount on Demand draft. Outstation cheque are also charged. Cheques and demand draft are increasingly losing their place as instruments that are used for payments. This is because, most individuals are today making payments through the RTGS and NEFT mechanism. These methods are faster than the traditional methods and there is also no worry of dishonour of a cheque.Having said that there is a minimum charge that is applicable on NEFT and RTGS transactions. The charges though are very nominal and compared to the convenience, these are much better way of remittance as compared to demand drafts and cheques.
What is the difference between draft and a check?
A Draft is a money instrument issued by a bank after receiving money from the person requesting for a draft issued in favour of another person. Where as a cheque is issued by an account holder to some one else or to self. Thus a person receiving a draft in his favour is much surer of getting his money as compared to a cheque where a stop order can be put to stop payment
What is the difference between bank draft and demand draft?
No difference . The actual nomenclature is demand draft in banking language . Bank draft is a slang used for demand draft . Its actually a mode of making payments in which the person paying the amount purchases the demand draft by prepaying the said amount to his bank and the bank issues the demand draft in favour of the payee and payable on demand at a designated branch of payee’s choice.This was a widely used method of payments in business world for carrying out transactions until fee years ago but with the computerisation and core banking they have lost relevance because now more modern methods if transferring amounts , like RTGS , NEFT have come in where money fan be transferred across accounts in different banks in real time .And cheques of most banks are paid at any branch of that bank , so need to get demand drafts issued gas minimised . Demand drafts are now a days required only to pay certain fees etc. .. for example , with some applications etc.