What is Demand Draft - DD Form, Validity, Charges & Benefits

In the constantly changing realm of financial transactions, ensuring safe and dependable payment methods has always been a top concern. Traditional financial instruments are still in use because they are reliable and trustworthy, even if digital payment systems have become incredibly popular recently. 

One such instrument, widely used for secure monetary transfers, is the demand draft (DD). This approach is especially popular when a guaranteed payment, including commercial transactions, school fees, or real estate deals, is necessary.

What is Demand Draft?

A Demand Draft (DD) is a financial instrument that allows a bank to transfer funds from one account to another. It ensures immediate payment to a recipient and provides a secure payment method.

You must submit the amount you want to send to the bank to obtain a Demand Draft. The bank then issues the DD for that specific amount. Your bank deducts the amount from your bank and reserves the same for the transaction. When the recipient presents the DD to your bank, the funds are directly transferred to their bank account.

DD is a prepaid payment instrument that never bounces like a personal cheque, as the specific amount of funds is already reserved. It ensures that recipients receive the full amount once they have the draft. Demand Drafts do not require the signature of the account holder. Additionally, DD is user-friendly and convenient. You can quickly get it from banks, even if you do not have accounts at the issuing bank.

Demand Draft Charges​

Follow this table to know the demand draft charges of different banks:

This information may change at any time as per the bank’s policy changes. To know the latest demand draft charges, you may visit the official website of the bank.

Demand Draft Form​ Sample

Here are some sample forms of different banks:

HDFC Demand Draft Form

IDFC First Bank Demand Draft Form

Demand Draft Validity​

A demand draft (DD) remains valid for 3 months from the date of issuance. If it is not presented within this period, it becomes invalid. However, the amount is not automatically refunded to the drawer, even though the payment has already been deducted from your account. 

The drawer must submit a formal application to the issuing bank to request revalidation. After verifying the details and records, the bank may revalidate the DD for 3 months. If the revalidated DD is not used within this period, it cannot be revalidated again.

What Documents are Required for Demand Draft​?

These are some of the required details to make a demand draft:

• Name and Address of the Payee
• Amount Payable to the Drawee (in Figures)
• Name of the City Where DD is Payable
• Exchange (Fee Charged by the Bank)
• Name and Address of the Drawer (Your Name)
• Total Amount Payable by the Drawer to the Bank (in Figures)
• Amount Payable to the Drawee (in Words)
• Signature of the Drawer
• Name of the Drawee

Types of Demand Draft

Two types of demand drafts are present: Time Demand Draft & Sight Demand Draft. Let’s understand them in brief:

Time Demand Draft

A time Demand Draft is a form of payment that can only be cashed after a specific period (known as the Demand Draft clearing time). The payer commits to pay on a particular date, and the bank handles the transaction based on this agreement.

Sight Demand Draft

A Sight Demand Draft is a bill of exchange that mandates immediate payment from the payer upon presentation. The payee must submit specific documents to the bank for verification to receive the payment. If the payee fails to provide these necessary documents, the bank will not process the payment for the draft.

Benefits of Demand Draft

These are the benefits of choosing a demand draft for paying someone:

• Convenience: Demand Draft (DD) is a convenient way to make larger payments, and there is no upper limit on the amount you can transfer.
• Secured Transaction: Compared to normal cheques, DDs are safer as no one can duplicate them or your signature. A bank issues a DD only if you have sufficient balance in your account to pay, so there is no chance of a bounce. 
• Fixed Amount: The amount in a DD is fixed, and you cannot change it. The payee is assured of receiving the correct amount.
• Prepaid Payment Instrument: Unlike a cheque, a DD never bounces as it is a prepaid payment instrument. The bank will only issue a DD on your behalf if your account has enough funds.
• Wide Acceptance: DDs are easily accessible and can be used for various situations as they are widely accepted across India.

Difference between Cheque and Demand Draft​

Follow this table to learn the difference between demand drafts and cheques:

How to Make Demand Draft Offline?

To issue a demand draft offline, you need to follow these steps:

• Visit your nearest bank and request a demand draft application form from the counter.
• Fill Out the Application Form. Complete the form by providing all necessary information, such as payee’s name, amount to be sent, any additional relevant details
• Ensure you deposit the total amount for the demand draft to confirm that your account has sufficient funds.
• Pay Any Associated Fees. Keep additional money to pay any fees or charges related to the issuance of the demand draft.
• Submit the duly filled-up form along with any required identification documents. The bank will verify your information and the details on the application.
• When your application is approved, the bank will issue the demand draft in the payee's name.
• Collect a receipt or acknowledgement from the bank, which should include the demand draft number, the date of issuance and the payee’s information. This receipt will assist you in tracking the status of your transaction.

How to Fill Demand Draft​ Form Online?

Here is the process of filling the demand draft online:

• Go to your bank’s official website and log into your internet banking account.
• Find the “Request and Enquiries” section within your online banking portal.
• Select the option to “Issue Demand Draft.”
• Choose the account from which you want the DD amount to be deducted.
• Enter the amount, details of the payee, and any purpose for the DD if necessary.
• Provide the bank’s branch code where you want the DD issued, and select the branch where it should be payable.
• Decide how you would like to receive the DD: pick it up in person or via courier.
• Review all entered information carefully, then click “Submit” to finalise your request.

How to Cancel Demand Draft?

Before you know how to cancel a demand draft, you should know its limitations. A demand draft represents a completed transaction and cannot be cancelled if delivered to the payee. Additionally, a demand draft is valid for only three months. If not encashed within this period, the payee risks losing access to the funds. Here is the process to cancel a demand draft: 

When you write a demand draft cancellation letter, it is essential to draft a formal letter addressing your branch manager. The letter should begin with a clear subject line about the specific reasons for cancellation. In the body of the letter, you must include details such as your account number, the demand draft (DD) number, and the amount. It is also essential to provide a brief explanation for the cancellation request. 

Final Word

A demand draft (DD) remains a trusted and secure financial instrument for hassle-free monetary transactions. Its prepaid nature ensures guaranteed payments, making it ideal for high-reliability scenarios, such as business deals, educational fees, or real estate transactions. With fixed charges, ease of issuance, and robust security, DDs offer users convenience and peace of mind. Understanding their validity, charges, and benefits empowers individuals and businesses to leverage this tool effectively for seamless financial operations.

Related Articles:
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2. Canara Bank DD Charges and Cancellation Fees
3. SBI DD Charges and Cancellation Fees
4. HDFC Bank DD Charges and Cancellation Fees
5. ICICI Bank DD Charges and Cancellation Fees