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Ans. Demand drafts have a validity period of 3 months from the date of issue (printed on DD). If it is not presented within its validity period, the DD becomes invalid. However, the amount is not refunded to the drawer automatically even if he made a payment from his bank account.

After the third month, you can re-validate the DD upon written request to the issuing bank. The revalidation of a DD can be done only once a year and after a year, the DD will be cancelled by the bank and a new DD will be issued after paying the required fees associated with the process.

A demand draft is a negotiable instrument to transfer funds from one bank to another. Unlike a cheque, an individual needs to request his/her bank to issue a demand draft in the recipient's name to transfer the amount.

If the demand draft has expired and has not been encashed by the payee, the amount is not automatically credited back into your account. You'll have to write an application to the issuing bank for revalidation of the DD.

As long as the bank can verify that the draft has not been cashed, it can cancel it and issue a new, replacement draft. Before you obtain a bank draft from your bank, be sure to verify its bank draft cancellation and replacement policies.

As per the RBI, the validity of demand draft in India is 3 months from the date when the draft was issued by the bank. You can revalidate the DD after three months by writing a request letter to the bank. Re-validation can only be done once a year and the DD will be cancelled after that.

Banker's drafts and cheques are deposited in the same way, but issued differently. A banker's draft is prepaid and issued by the bank. While a cheque isn't prepaid. Both can be useful in different situations.