Types of Demand Drafts
1. Sight demand draft
The working of sight draft is quite similar to a cheque as both have to be paid whenever presented. Sight drafts are used for international transactions. When presented instantly money could be yielded after document verification. Only when specific documentation has been examined, the proposal is accepted and the transaction happened. If any of the needed documents are not submitted, the payee will not be able to collect the money.
2. Time demand draft
Time Draft is also known as Date Draft. These types of drafts have a future date of payment. Time drafts are used as a transaction place between different countries like at the time of export and import when presented payment comes after 15 days. It is payable only after a specific period of time and before that, it cannot be drawn from the bank.
Full Form of DD | What is DD?
DD stands for Demand Draft. Demand Draft is one of the financial instruments that is used to make payments easier. Sometimes Demand Draft and Cheque are taken as similar things however there are a variety of facts that makes them apart. Unlike cheques, DD is a prepaid instrument means DD is issued after taking the amount that’s why it is a secure way to get payments also which is a major drawback in the case of a cheque where cheque bouncing is a common issue in everyone’s life.