1. Meaning
A cheque is an unconditional social club directing the banker to pay a surely total of coin entirely to or to the social club of a surely person.
A draft is an social club to pay coin drawn past times i purpose of a banking venture upon to a greater extent than or less other purpose of the same banking venture for a total of coin payable to social club on demand.
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2. Facility
The current account in addition to saving account holders instruct a banking venture jibe 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 inward the representative of cheques equally they tin last dishonoured or payment tin last stopped.
The brain purpose of a draft is to transfer coin from i house to to a greater extent than or less other or to guarantee the certainty of payment to the payee.
4. Drawer
In representative of cheque, the drawer is the client of the bank.
In representative of draft, the drawer is the banking venture itself.
5. Bank charges
The banking venture may non accuse for issuing the banking venture jibe book.
The banking venture charges a nominal fee or committee to final result a draft.
6. Dishonour
Cheques tin last dishonoured for diverse reasons.
There is no inquiry of dishonouring of draft.
7. Stopping of payment
In representative of cheque, the drawer tin inquire the banking venture to terminal payment of the banking venture jibe fifty-fifty if it is delivered to the payee.
In representative of draft, the purchaser of the draft tin inquire the banking venture to terminal payment earlier the draft is delivered to the payee.
8. Popularity
Cheques are real mutual in addition to pop mode of payment.
Drafts produce non relish much popularity equally compared to cheques.
9. Clearance
In representative of cheque, at that spot is a quest for clearance.
In representative of a draft, at that spot is no quest for clearance, if DD is drawn on the same bank.
10. Parties involved
Three parties are involved inward banking venture jibe transaction viz., (a) Drawer, (b) Drawee, in addition to (c) Payee.
Two parties are involved inward draft transaction viz., (a) Drawer, in addition to (b) Payee.
