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Updated: 15-01-2020 07:46:10 AM

A Demand Draft, in short DD, is a negotiable instrument paid in advance to the bank by the payer. The bank then becomes the payer, on behalf of the person who requested a DD, for the payee. If the payer has a bank account with the bank he wants to get a DD from, he can pay using his bank account. Others can pay in cash for DD.

For amounts exceeding Rs. 50,000 or more, you will have to give your PAN details to the bank. Otherwise, for smaller amounts, you only need to present your ID and address proof to the bank. A DD is valid for 3 months from the date of issue.

Demand Draft Charges

When a customer visits a bank to request a Demand Draft, he has to pay fees to the bank simply known as Demand Draft Charges. Each bank has its own way to calculate the charges and you need to check their website or speak to a representative to know the exact amount you will be charged for a DD.

Here is a table that shows the average charges levied by most banks in India to issue a Demand Draft:

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)

If the DD expires before it is encashed, you can get it revalidated. The banks charge Rs. 200 + GST for this service. You need to submit a form and furnish the original DD for revalidation.

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If the DD is lost or stolen, you can get a duplicate DD issued at a charge of Rs. 200 + GST. You will need to submit a copy of the DD, your ID, and a form to avail this service.

Features of Demand Drafts (DD)
Frequently Asked Questions:
Features of Demand Drafts (DD)

A Demand Draft is still popular as compared to cash and cheques since it is secure and can only be encashed by the payee. Here are a few features of DDs:

  • If a customer wants to pay the payee only after a certain date, he can get the bank issue the Demand Draft payable after that date. The payee will only be able to get the payment after that specified date. Many customers use timed Demand Drafts to pay people for their services. They keep the date of completion of the project as the date from which the DD is payable.
  • For customers who want to make payments in a foreign currency, they can visit a bank to get a Demand Draft made for the foreign currency. The charges for foreign currency DDs are higher than those payable in the Indian currency. This can help people securely send money overseas.
  • If a customer is worried about the safety of his money when he hands over the DD, he can choose to go for a crossed Demand Draft. A crossed DD cannot be encashed over the counter. The payment is deposited in the account of the payee irrespective of the bearer of the DD. All Demand Drafts of Rs. 50,000 and above need to be crossed.
  • The payer can cancel the Demand Draft before it is encashed by the payee. The payer needs to visit the bank and present the necessary documents to request the cancellation. If the payer paid for the DD in cash, he needs to submit the original DD, cash receipt, and the Demand Draft cancellation form. However, if the payer used his bank account, he needs to submit the original DD along with the Demand Draft cancellation form. The bank will deduct the cancellation charges before refunding the balance.
  • If you lost your Demand Draft, you need to sign an Indemnity Bond in stamp paper for the issuing bank. A copy (photo or Xerox copy) can be helpful to present when you visit the bank. The bank will take some time to process the payment. Some banks clear payments for lost demand drafts in one week while others wait until the expiry date of the DD. In any case, they will deduct charges before issuing you a refund.

Always make sure to check the details filled in a Demand Draft whether you receive it as a form of payment from a payer or get it issued from a bank as a payer. The important fields on a Demand Draft (DD) and the values they contain are:

Field in the DD

Field Details
Bank branch

The branch of bank issuing the DD

To Pay

Details of the payee
Date

Date of issue of DD (Validity period is 3 months from this date)

Amount (in words)

The amount payable to the payee in words
Amount (in figures)

The amount payable to the payee in figures

Branch

The bank branch that pays the amount to the payee
DD number

A Unique Number Assigned to the DD

Signature

Signatures of the officers of the bank branch issuing DD

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It is advisable to take a photo or get a copy of the Demand Draft. In case the DD is lost or stolen, you will be able to use this copy to get a duplicate DD issued.

Frequently Asked Questions:

Q: Can I apply for a DD online?

A: If you have registered for net banking with your bank, you can easily apply for a DD online. You need to login to your bank’s website and choose the “Issue a Demand Draft” option. This can usually be found under the “Payments and Transfers” menu. Fill in the necessary details and make the payment. Most banks give you two options here, i.e. pick the DD in person or get it couriered it to your address. If you want to pick the DD in person, you need to visit the bank branch where you have your account and get the DD by showing an acknowledgement slip issued to you online when you applied for a DD. For courier, you need to furnish your address details and pay the courier charges. 

Q: How to Fill the DD Form properly?

A: If you want to make a payment using a Demand Draft, you need to fill a DD form and submit it to the bank. The bank will deduct the money from your bank account or collect cash from you to issue a DD.

Here are the fields in the DD form that you need to fill:

Field in the DD Form

Details to be Filled
Name of the Drawer

Your Name

Name of the Drawee

Full Name of the Drawee
Name of the City where the DD is Payable

Name of the City of the Drawee

Amount (in Words)

The Amount Payable to the Drawee in Words
Amount (in Figures)

The Amount Payable to the Drawee in Figures

Exchange

Fees Charged by the Bank for the DD
Total Amount

Total Amount Payable to the Bank (in Figures)

Signature of the Drawer

Your Signature
Name and Address of the Drawer

Your Full Name and Address

 In many DD forms, the drawer is referred to as the “applicant” or “payer” and drawee is referred to as “payee”.

Q: My DD has expired. What should I do now?

A: Demand drafts have a validity period of 3 months from the date of issue. If the DD is not presented within its validity period, it becomes void. However, the amount is not refunded to the drawer automatically. The drawer can submit the application to the issuing bank for the revalidation of the DD if it has expired. The issuing bank will verify the records and details before revalidating the DD for another 3 months. If the revalidated DD is not presented, it cannot be revalidated again. The drawee/payee cannot apply to get a DD revalidated.

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