DD Cancellation - Check How to Cancel a Demand Draft (2024)

FAQs

DD Cancellation - Check How to Cancel a Demand Draft? ›

Demand Draft Issued Upon Amount Deducted from your Account:

You are hereby requested to withdraw the above-mentioned Demand Draft with no ___, which was issued by your bank on ____ for rupees _____ in favour of _____. The DD has not been used due to _____ reasons. I would like you to cancel the DD and put the funds into my savings account with ______ (A/c number) number.

You need to visit the issuer bank and follow the procedure to cancel a DD if it has not been cleared. If you paid by cash, you need to submit the original DD, receipt of cash payment, and DD cancellation form to request cancellation of DD.

Canceling a Bank Draft

Since the buyer has already paid the funds represented by the bank draft, the only means of effectively canceling the draft is to have the seller cash it and return the funds to the buyer.

The drawee banks verify the authenticity of the demand drafts and ensure that the signatures and other details are genuine. Once the demand drafts are verified, the drawee banks debit the account of the payer and credit the account of the payee. This process is known as the clearing of the demand draft.

Once the DD is issued by the bank after you pay by cash or by deducting the amount from your account, if the need arises for the cancellation of the DD, visit the bank from which the draft was issued. You may have to write an application addressing the bank or branch stating the need for the cancellation.

No cancellation after deposit: Once you have handed over the DD, it is not possible to cancel it. Unlike a cheque, where you can stop payment if it's lost or stolen, you cannot stop payment on a Demand Draft. Subject to fraud: Fake or counterfeit Bank Drafts can be produced, leading to financial loss for the recipient.

You can either get in touch with your bank or building society and tell them which one you want to stop, or you can cancel online or via your banking app. To make things simple, it's also worth telling the organisation you were paying that you've stopped the Direct Debit.

Make sure you cancel at least a full day before a Direct Debit is due to be collected. Otherwise, it's possible that the payment might already be what's called “in flight” and can't be stopped. The best thing to do if you are unsure is check how much notice your bank or building society needs.

Are bank draft and demand draft the same? ›

Bank draft is a slang used for demand draft . Its actually a mode of making payments in which the person paying the amount purchases the demand draft by prepaying the said amount to his bank and the bank issues the demand draft in favour of the payee and payable on demand at a designated branch of payee's choice.

How long does a bank draft take to clear? Most checks take several days before you receive funds in your account. But bank drafts clear much more quickly, often appearing in your account within 24 hours. That's because the issuer's guarantee means fewer steps are needed to verify that the money is present.

A demand draft is a negotiable instrument where the amount is paid before the DD is issued by the bank, hence, the DD is secure and cannot bounce as a cheque could.

A bank draft is difficult to cancel since the funds have already been withdrawn from the buyer's account and transferred into the bank's reserve account. However, if the bank can confirm that the bank draft has not been cashed out by the payee, it might agree to cancel the bank draft and refund the buyer's account.

Demand drafts are only payable on demand and they can be only deposited in the bank, unlike cheques demand drafts cannot be paid to the bearer.

If the demand draft is not cashed by the appropriate payee, it becomes stale, i.e.invalid after 90 days. In this case, the payee has to return it to the individual who used it as a payment instrument, and it may be cancelled as stated above.

I withdraw my authority for you to directly debit my account effective from date/immediately. Delete one. If you are cancelling your agreement with the merchant then you should say this by including the next sentence. I cancel my agreement with you for [describe the services] from the same date.

You will need to get a cash receipt as well. There is no way to cancel your demand draft online. It is necessary to visit the bank branch where you have applied for the Demand draft to get your DD cancelled. You need to follow the proper process and format while writing the cancellation application.