Demand Draft (DD): Definition, Usage & How It Works

The full form of DD is Demand Draft.

A Demand Draft (DD) is a type of financial instrument that allows the transfer of funds from one person to another. It is similar to a check, but it is issued by a bank and drawn on another bank. This means that the bank guarantees the payment of the DD, which makes it a safer and more reliable method of payment than personal checks.

DDs are typically used to make large or important payments, such as down payments on a house, car payments, or tuition fees. They can also be used to send money to overseas recipients.

To create a DD, the individual must first deposit the funds at a bank. The bank will then issue a DD in the name of the payee. The payee can then present the DD at the bank on which it is drawn and receive the funds.