Demand Draft

Demand draft, which is commonly known as DD, refers to a payment method employed to facilitate transactions between two banks. It ensures that the payee mentioned on the DD receives the amount mentioned. 

A crucial point to note is that only banks can issue a DD, and you or the payee cannot. Now that you know what is demand draft, here is a demand draft example: A business purchasing products on credit may ask the bank to issue a DD to the company (payee) and the payee will take the DD to the issuing bank upon maturity and collect the payment.