Difference between demand draft/ banker's cheque/ pay order

A demand draft is a pre paid negotiable instrument, wherein the drawee bank undertakes to make payment in full when the instrument is presented by the payee for payment. The demand draft is made payable at a specified branch of a bank at a specified centre. In order to obtain payment, the beneficiary ha to either present the instrument directly to the branch concerned or have it collected by his bank through the clearing mechanism.

A BANKERS CHEQUEis another payment instrument which is used by the banks to settle payment obligations on behalf of their customers. This instrument is guaranteed by the bank for its full value and is similar to a demand draft. In practice, these instruments are payable at the branch of issue and are used for payment within the local clearing jurisdiction.

sorry friend i didnot know much details about pay order...

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Some people say that Banker's cheque and Pay Order are same. Is it correct?

yes,it is correct that banker'cheque and pay order have same meaning.

Pay Order is for local payment as like as Bankers cheque.......but DD for out station payment but all are same by nature..........

Pay Order........May be issued to party for same branch or for local clearence.

Bankers Cheque.........Issued for local clearence but not for same branch.

Demand Draft........Issued for out station payment only.

But all are same by nature and issued to the party like a cash or you can say.... prepaired by the bank after payment.

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