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Demand Draft, popularly known as DD, is a method used to transfer money from one account to another. Both individuals and banks use demand drafts to transfer money. They are different compared to cheques, and the signature of the issuer is not needed to cash a demand draft.
Only banks can issue a demand draft. They can’t be issued at an individual level. Also, banks only issue a demand draft when there is sufficient balance available in the account. Thus, they are much safer and carry less risk of fraud as compared to a cheque.
They are usually issued when the amount dealt with is huge and the money can only be deposited into the account. When you request a demand draft (DD) from a bank, the bank issues the DD and debits the corresponding amount from your account. The bank that creates the DD is called the issuing bank, and you (the person requesting it) are called the drawer. The bank the DD is meant to be paid by is called the drawee.Like all the other banks, the State Bank of India also issues demand drafts for seamless transfers and transactions. Many educational institutions, such as schools, colleges, institutes, and examination centres, often use SBI demand drafts for their application or admission processes.
SBI Demand Draft Details
An SBI Demand Draft consists of the following details:
- The bank name, branch location, and details of the issued demand draft.
- The name of the payee, whether it is an individual or an organization.
- Issue date of the demand draft
- The amount (in numbers and in words)
- Name of the bank branch that will pay the amount
- Demand draft’s serial number at the bottom of the DD
- Signature of the bank officers who have issued the demand draft
Difference Between SBI Demand Draft and Cheque
Here's a comparison of SBI demand drafts and cheques:
- Payable to:
- Demand Draft: A specific person (order)
- Cheque: A specific person (order) or anyone (bearer)
- Guaranteed payment:
- Demand Draft: Guaranteed because you pay the bank upfront.
- Cheque: Not guaranteed - it can bounce if there isn't enough money in the account.
- Issued by:
- Demand Draft: The bank
- Cheque: Account holder only
- Available to:
- Demand Draft: Everyone (even non-account holders)
- Cheque: Account holders only
- Issuance charges:
- Demand Draft: Charged a fee
- Cheque: Usually no fee (except for replacing lost chequebooks)
Validity of SBI Demand Draft
Banks issue demand drafts, which are valid for 3 months from the date you buy them. If you don't cash it within that time, the demand draft expires. But, the bank can reissue an expired demand draft for a fee.
Only the person who bought the demand draft (drawer) can request a reissue; the payee cannot. A reissued demand draft cannot be reissued again.
The bank charges a fee of INR 200 plus GST to reissue a demand draft.
How to Issue and Generate a SBI Demand Draft
An SBI demand draft can be generated both online and offline. Let’s check out both ways:
How to Issue and Generate a SBI Demand Draft Online
- Visit SBI's website and log in using your net banking credentials.
- Once logged in, click on the 'Payments/Transfers' tab.
- Under 'Other Payments/Receipt', select 'Issue Demand Draft'.
- Choose the account from which you want to pay for the demand draft.
- Enter the amount of the demand draft.
- In the 'In favour of' field, enter the name of the beneficiary.
- Enter the branch code where you want the demand draft to be payable.
- Decide how you want to receive the demand draft: collect it from a branch or get it delivered by post.
How to Issue and Generate a SBI Demand Draft Offline
- Visit an SBI branch and go to the drafts issuance counter.
- Fill out an application form that has the following details:
Beneficiary's name (the person to whom the DD is to be payable)
City or branch where the DD can be cashed DD amount Bank's service charge (which varies depending on the amount)Your name (the applicant) Signature of the person depositing the money (this can be someone other than you)
Fees and Charges of SBI Demand Draft
Demand Draft Issue/Amount | Charges |
|---|---|
Up to INR 5,000 | INR 25 (including GST) |
INR 5,000 to INR 10,000 | INR 50 (including GST) |
INR 10,000 to INR 1,00,000 | INR 5 (including GST) per INR 1000 Min. INR 60 (including GST) |
Above INR 1,00,000 | INR 4 (including GST) per INR 1,000 Min. INR 600 (including GST) Max. INR 2,000 (including GST) |
DD Cancellation or Issuing of Duplicate DD | INR 200 + GST |
Demand Draft Cancellation Charges | Up to INR 500 – NIL Above INR 500 and up to INR 5,000 – INR 25 + GST Above INR 5,000 and up to INR 10,000 – INR 50 + GST Above INR 10,000 – INR 100 + GST |
Cancellation of an SBI Demand Draft
You can't cancel an SBI demand draft online. You have to visit a branch in person. When you buy a demand draft, the money comes out of your account right away. But you can get your money back by cancelling the DD. Here's what to do:
- If you paid with cash: Bring the original DD and your cash receipt to the bank. They will give you your money back, minus a cancellation fee.
- If you paid from your account: Fill out a DD cancellation form that you can get at the bank. Submit the completed form with the original DD. The bank will refund the money to your account, minus a cancellation fee.
Important:
- SBI charges a fee to cancel a demand draft.
- It's difficult to get your money back if you lose your DD. Talk to a bank official if this happens.
How to Avoid SBI Demand Draft Fraud
1. Record the drawer's details: Write down all the information about the person who bought the demand draft (the drawer).
2. Make a copy: Always photocopy the demand draft for your records.
3. Report suspicious activity: If anything seems wrong, contact the bank immediately.
Frequently Asked Questions:
1. What is the SBI demand draft?
An SBI demand draft is a guaranteed payment instrument issued by SBI, similar to a check but safer because the bank guarantees the funds.
2. How many types of SBI demand drafts are there?
SBI offers regular demand drafts with no distinction in types.
3. What are the cancellation charges of the SBI demand draft?
SBI charges a fee to cancel a demand draft of INR 200 plus taxes.
4. Can I cancel my lost SBI demand draft?
If you lose your demand draft, you'll need to visit the bank to cancel it. To speed things up, bring a copy of the draft or the reference number. This is why it's always a good idea to photocopy your demand drafts for safekeeping.
5. Can an SBI demand draft be cancelled after three months?
An SBI demand draft is good for 3 months. If you miss that window and want to cancel it, you're out of luck. Instead, you'll need to request a revalidation by filling out an application at the bank.
6. Can I get my demand draft refunded in SBI Bank?
Yes, you can get a refund for an SBI demand draft if you cancel it within the stipulated time.
Disclaimer: This page includes information that has been compiled from many sources and is only offered for informational purposes. Since this type of data might change over time, we cannot guarantee that the information supplied or included within it is accurate. It is anticipated that the user would confirm with the relevant source prior to taking any choices or actions.