1. Meaning
A blogspot.com//search?q=what-is-cheque-definition-kinds-and">cheque is an unconditional lodge directing the banker to pay a sure as shooting amount of coin exclusively to or to the lodge of a sure as shooting person.
A blogspot.com//search?q=what-is-cheque-definition-kinds-and">draft is an lodge to pay coin drawn past times 1 part of a banking corporation upon closed to other part of the same banking corporation for a amount of coin payable to lodge on demand.
Image credits © Moon Rodriguez.
2. Facility
The blogspot.com//search?q=what-is-cheque-definition-kinds-and">current account together with blogspot.com//search?q=what-is-cheque-definition-kinds-and">saving account holders instruct a banking corporation lucifer facility.
Draft is issued to anyone fifty-fifty to non-account holders.
3. Purpose
Cheques are used to brand payments or to settle transactions. There is no certainty of payment inwards the instance of cheques every bit they tin live on dishonoured or payment tin live on stopped.
The principal utilisation of a draft is to transfer coin from 1 house to closed to other or to guarantee the certainty of payment to the payee.
4. Drawer
In instance of cheque, the drawer is the client of the bank.
In instance of draft, the drawer is the banking corporation itself.
5. Bank charges
The banking corporation may non accuse for issuing the banking corporation lucifer book.
The banking corporation charges a nominal fee or committee to final result a draft.
6. Dishonour
Cheques tin live on dishonoured for diverse reasons.
There is no enquiry of dishonouring of draft.
7. Stopping of payment
In instance of cheque, the drawer tin inquire the banking corporation to terminate payment of the banking corporation lucifer fifty-fifty if it is delivered to the payee.
In instance of draft, the purchaser of the draft tin inquire the banking corporation to terminate payment earlier the draft is delivered to the payee.
8. Popularity
Cheques are rattling mutual together with pop blogspot.com//search?q=what-is-cheque-definition-kinds-and">mode of payment.
Drafts create non bask much popularity every bit compared to cheques.
9. Clearance
In instance of cheque, at that spot is a demand for clearance.
In instance of a draft, at that spot is no demand for clearance, if DD is drawn on the same bank.
10. Parties involved
Three parties are involved inwards banking corporation lucifer transaction viz., (a) Drawer, (b) Drawee, together with (c) Payee.
Two parties are involved inwards draft transaction viz., (a) Drawer, together with (b) Payee.
Comments