Advantages of Demand Draft:
- It may be crossed also i.e. “Account payee”. Hence cannot be encashed at the Bank counter.
- It cannot be dishonoured due to insufficiency of funds thus it ensures its payment to the payee.
Due to the above advantages, it is considered as an important instrument for payments. It helps avoid duplication of efforts when cheques bounced. The payee is sure to receive the amount. If the DD is lost in transit, the payee can stop payment of the lost DD. The purchaser is not mentioned a party to DD. Hence he cannot stop its payment.
