| Cheque | Demand Draft |
| 1. Cheque is drawn by a person. | Draft is drawn by a bank. |
| 2. It is dishonoured in case of inadequate funds in the bank account of the drawer. | The draft amount is taken in advance by the bank. Therefore, the question of its dishonour does not arise. |
| 3. A cheque can be drawn payable to bearer. | A draft cannot be made payable to beare |
| 4. In case of a cheque the person who receives the payment has to pay collection charges. | In case of a draft commission is paid in advance by the sender of money. |
| 5. The payment of a cheque can be stopped by giving a written notice to the concerned bank. | The payment of a bank draft cannot be so easily stopped. |
