Demystifying Demand Drafts A Step-by-Step Guide

how to demand draft


 Demand drafts are widely used in financial transactions, providing a secure and convenient method of transferring funds. Whether you need to pay bills, make payments for purchases, or send money to someone in another city or country, understanding how to demand draft can be immensely beneficial. In this article, we will delve into the intricacies of demand drafts, explaining what they are, how they work, and providing a comprehensive step-by-step guide to help you navigate the process with ease.

What is a Demand Draft? 

A demand draft, also known as a banker’s draft or a payable-at-par cheque, is a payment instrument issued by a bank on behalf of an individual or organisation. It guarantees the payment of a specified sum to the recipient. Unlike personal checks, demand drafts are considered more secure since they are prepaid instruments and do not rely on the account balance of the issuer. This ensures that the recipient receives the funds, regardless of the issuer’s account status.

Understanding the Demand Draft Process 

To initiate a demand draft, you need to visit your bank and provide specific details such as the beneficiary’s name, account number, and the amount to be paid. The bank will then debit your account for the draft amount, including any additional charges, and issue the demand draft in favour of the beneficiary. The draft will typically mention the issuing bank, the issuing branch, the draft number, and the validity period. You can choose to collect the demand draft or request it to be sent to the beneficiary via postal mail or courier.

Step-by-Step Guide to Creating a Demand Draft 

  • Gather Required Information 

Collect all the necessary information about the beneficiary, including their name, account number, and complete address. Ensure the accuracy of these details to avoid any complications or delays in the transaction.

  • Visit Your Bank 

Go to your bank and approach the teller or customer service representative to request a demand draft. Specify the amount to be paid and provide the beneficiary’s information. Some banks may require you to fill out a demand draft application form.

  • Submit Documentation and Pay 

Submit any required documentation, such as identification proof or account verification, as per your bank’s policies. Pay the draft amount along with any applicable charges, including service fees and taxes. The bank will debit your account for the total amount.

  • Receive the Demand Draft 

Once the payment is made, the bank will issue the demand draft. It will provide you with a draft number and mention important details such as the issuing bank, the issuing branch, and the validity period. Ensure you carefully examine the draft for accuracy.

  • Deliver or Send the Demand Draft 

 You can choose to collect the demand draft from the bank or request it to be sent to the beneficiary. If you opt for delivery, ensure you keep the draft secure during transit. If you prefer sending it to the beneficiary, provide the bank with the correct address and pay any additional charges for postal mail or courier services.


What are examples of demand draft?

For example, if a small business owner purchases products from another company on credit, the small business owner asks his bank to send a demand draft to the company for payment of the products, making him the drawer. The bank issues the draft, making it the drawee.

What is another name for a demand draft?

Demand drafts are also known as sight drafts, as they are payable when presented by sight to the bank.

What is the benefit of DD?

If the merchant wishes to change the payment amounts or terms, this must also be agreed to by the customer. One of the key benefits of Direct Debit is that it offers a quick and convenient way to make payments.


Demand drafts offer a reliable and secure means of transferring funds. By following the step-by-step guide provided in this article, you can confidently create and use demand drafts for various purposes. Remember to double-check all the information provided to ensure accuracy and avoid any inconveniences. Should you have any doubts or queries, consult with your bank for further guidance. With demand drafts, you can facilitate payments with ease and enjoy the peace of mind that comes with a guaranteed and traceable financial transaction.

Read Also : Dematerializing Sovereign Gold Bonds (SGBs) A Digital Revolution in Gold Investments