Difference between Demand Draft and Cheque

1. A cheque is issued by an individual whereas a demand draft is issued by a bank.

2. A cheque is drawn by an account holder of a bank, whereas a draft is drawn by one branch of a bank on another branch of the same bank.

3. A Cheque can be dishonored for want of sufficient balance in the account. Whereas a draft cannot be dishonoured.Hence there is certainty of the payment in the case of a demand draft.

4. A cheque is defined in the Negotiable Instrument Act, 1881, whereas a demand draft has not be precisely defined in the NI Act.

5. In a cheque, the drawer and the drawee are different persons. But in a draft both the drawer and the drawee are the same bank.
6. A cheque can be made payable either to a bearer or order. But a demand draft is always payable to order of a certain person.