Point of Distinction Between Bank Draft and Cheque

Point of Distinction Between Bank Draft  and Cheque

class 12th board – HSC Board of  Maharashtra State Board  – class 12th – Organization of Commerce and management – Studies notes, study material, distinguish between, difference between Bank Draft and Cheque  , study material, study notes, study perpetration.

Sr.NoPoints of distinctionBank DraftCheque
1.MeaningA draft is an order to pay money drawn by one office of a bank upon another office of the same bank for a sum of money payable to order on demandAccording to the Indian Negotiable Instrument Act, a cheque is an unconditional order directing the banker to pay a certain sum of money only to the order of certain person.
2.DrawerA draft is the bank itself.The drawer is the account holder of the bank.
3.DishonorA draft can never be dishonored as it is already paid for.The cheque may or may not be dishonored.
4.AimIt aims at facilitating immediate outstation payments.It aims at facilitating businessman for effecting local payments.
5.PaymentsPayment of bank draft can be obtained immediately.Payment of crossed cheques cannot be obtained immediately.
6.Facility extended toA draft facility is extended to both account holders of the bank as well as outsiders.Cheque facility is extended to account holders of the bank only.
7.Bank chargesThe bank charges a nominal amount to issue a draftThe bank may not charge for issuing cheque book.
8.ReliableA bank draft is more reliable as it is issued by the bank only after receipt of payment.Cheque issued by an individual may not be cleared due to many reasons such as sign not matching, post dated, less balance, etc.

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