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.No | Points of distinction | Bank Draft | Cheque |
| 1. | Meaning | A 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 demand | According 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. | Drawer | A draft is the bank itself. | The drawer is the account holder of the bank. |
| 3. | Dishonor | A draft can never be dishonored as it is already paid for. | The cheque may or may not be dishonored. |
| 4. | Aim | It aims at facilitating immediate outstation payments. | It aims at facilitating businessman for effecting local payments. |
| 5. | Payments | Payment of bank draft can be obtained immediately. | Payment of crossed cheques cannot be obtained immediately. |
| 6. | Facility extended to | A 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 charges | The bank charges a nominal amount to issue a draft | The bank may not charge for issuing cheque book. |
| 8. | Reliable | A 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. |