Know About Demand Draft

It is also known as Tele Cheque

It is an Account payee instrument

A Demand Draft is a kind of Cheque which do not require the signatures of a customer on it

The information that is required for demand draft to be cashed are-

Bank account number of customer.

Bank routing number (nine digit number used to identify a financial institution in a transaction, they can also be found on online banking sites of the financial institution.)

Demand draft is much safer than a normal Cheque because it do not carry the signatures of the customer.

Usually colleges and universities require payment of application fee to be done through a  DD which is a safer way as compared to  a Cheque, In this case, the student would apply to his bank to get a DD issued favoring that particular college. 

Suppose the bank which issues DD for college to the student known as Drawer branch located in Mumbai and the bank which will accept DD for the college in Bangalore known as Drawee branch and the college is called payee

Usually the DD will carry the name/code of the Drawee branch and of the Drawer branch both. The placements of this varies from bank to bank.

The bank would charge the customer for creation of DD, in the form of a commission. Hence the customer has to pay an amount equal to (DD amount + Commission + Service Tax).