Home > Economics Questions and Answers > Which of the following is called a Banker’s Cheque?
Which of the following is called a Banker’s Cheque?
A
Demand Draft
B
Debit Card
C
Fixed Deposit
D
Credit Card
Correct Answer:
A
Demand Draft
- A Demand Draft (DD) is popularly known as a banker’s cheque.
- It is issued by a bank after receiving payment from the customer in advance.
- A Demand Draft is considered a secure mode of payment because it cannot bounce like a normal cheque.
- It is generally used for making payments to another person or organization in a different city.
- The bank itself guarantees the payment of the Demand Draft.
- Demand Drafts are often used for application fees, admissions, and official transactions.
- Debit Card and Fixed Deposit are banking facilities, not banker’s cheques.
- Pay Order is similar to a DD but is usually used for payments within the same city.