A demand draft is more secure than a normal cheque as it can only be credited to a specific payee’s account, and a customer can only be reimbursed on request under indemnity if the draft is lost or stolen.

A Demand Draft is a much safer and certain method of payment than cheques, since in the case of cheques, an individual is the drawer and hence the cheque can be dishonoured by the drawee bank due to insufficiency of funds in the drawer’s account. But since in the case of a DD, the drawer is a bank, payment is certain and it cannot be dishonoured.