DEMAND DRAFT Meaning and
Definition
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A demand draft is a financial instrument that is used for making payments. It is a type of check that is issued by a bank on behalf of one person or organization to another person or organization. The demand draft is typically payable to a specific beneficiary, and it is widely used for secure and convenient fund transfers.
A demand draft works as a written order to the bank, instructing it to pay a specific amount of money to the recipient mentioned on the draft. Unlike a regular check, a demand draft is prepaid and guaranteed by the bank, ensuring that the recipient will receive the specified funds.
To obtain a demand draft, the payer needs to visit their bank and provide the necessary details, including the recipient's name, the amount of money to be transferred, and any specific instructions. The bank then debits the payer's account and issues a demand draft, which can be used by the recipient to claim the funds.
Demand drafts are commonly used for various purposes, such as salary payments, purchasing goods or services, settling bills, or making donations. They are often preferred over personal checks, as they offer greater security and assurance of payment since they are guaranteed by the issuing bank.
In summary, a demand draft is a prepaid financial instrument issued by a bank, allowing the payee to claim a specified amount of money. It offers a reliable and secure method of transferring funds, making it a popular choice for various financial transactions.
Common Misspellings for DEMAND DRAFT
- semand draft
- xemand draft
- cemand draft
- femand draft
- remand draft
- eemand draft
- dwmand draft
- dsmand draft
- ddmand draft
- drmand draft
- d4mand draft
- d3mand draft
- denand draft
- dekand draft
- dejand draft
- demznd draft
- demsnd draft
- demwnd draft
- demqnd draft
- demabd draft
Etymology of DEMAND DRAFT
The term "demand draft" has its origin in the banking industry. It consists of two components: "demand" and "draft".
- Demand: The word "demand" in this context refers to the idea that the funds transferred through the draft can be demanded by the recipient from the bank or financial institution where the draft is drawn on. It signifies that the recipient has the right to demand the payment from the bank as per the instructions on the draft.
- Draft: The word "draft" refers to a written order or a document that is used to authorize the transfer of funds from one party to another. In the case of a demand draft, it is essentially a type of check or a financial instrument issued by a bank on behalf of a customer, which allows the recipient to claim the specified amount from the bank.
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