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What is the purpose of a demand draft?

ATo store valuables

BTo send money from one place to another

CTo transfer money internationally via telegraph

DTo withdraw cash from an ATM

Answer:

B. To send money from one place to another

Read Explanation:


  • A demand draft (DD) is a widely used banking instrument that serves as a secure way to transfer money. It's more reliable than a personal check because it is issued by a bank and the payment is guaranteed since the amount is already debited from the payer's account when the draft is issued.

Some key points about demand drafts:

  1. It is valid for 3 months (as shown in one of the similar questions)

  2. Payment can be stopped if the draft is lost (as indicated in another similar question)

  3. It's a safer alternative to carrying cash for making payments

  4. The amount is payable on demand, hence the name "demand draft"

  • This banking instrument is commonly used for making payments for educational fees, business transactions, and other situations where a guaranteed form of payment is required.




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