Full Form of DD:
DD Full Form is Demand Draft. DD is a draft related to financial services. It can be encashed and converted into money on demand. It is a pre-paid financial instrument that is negotiable. DD includes specific information like the name of the payer as well as the name of the payee, date of drawing the DD, amount to be paid, the name of the branch of the bank where the DD is payable, authorized signature and seal of the banker.
The payer has to pay the bank in advance to authorize the credibility of a DD. Then the payee has to produce the counterpart of the DD to the bank with which his/her account is related. The bank then checks and examines the credibility of the DD and the money is then transferred to the account of the payee. The validity of a demand draft is 3 months. After that, it becomes ineffective and invalid, and the amount will be no longer paid to the payee.
Banks demand specific charges while preparing a DD. The charge varies from one bank to the other and it also depends on the value mentioned in the draft. Banks also demand charges for the cancellation of a drawn draft. A DD is better than a cheque regarding the factors of credibility and assurance because it is prepared by an authorized banker and not by a non-banker individual.
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