Foreign Demand Draft – An Overview

Foreign demand draft

Do you have friends, family, or an acquaintance living abroad? Do you need to send money to them monthly or occasionally? There are various ways that you can transfer money to a foreign recipient. You can;

  • Transfer the money via online remittance;
  • Wire the money online; 
  • Send an international money order; or
  • Transfer via an international demand draft.

Although online remittance and wire transfer are the most preferred means on cross border transactions, some people still use foreign demand drafts to send money to a friend, family, or someone else living abroad. Moreover, knowing about all the options that you have for cross border transfers always comes in handy; keeps your choices open in unforeseen situations. With that in mind, let’s give you a brief overview of the foreign demand draft and the process of sending one. 

What is a foreign demand draft?

Foreign demand draft or FDD is a negotiable financial statement or bank draft used by an individual to send money from a domestic bank account to a foreign bank account. Also known as foreign exchange demand draft, like a normal DD this too is drawn in favour of the beneficiary on whose account the sender wants to transfer the money. Both the sender and the recipient would need to have an active bank account on both sides of the border to transact seamlessly. You can either go to a bank or a financial institution that facilitate foreign demand drafts

What are the Advantages of Foreign Demand Draft?

The FDD works both ways. Either you can send it to a foreign recipient or vice versa. Either way, when the money is withdrawn using the draft, the recipient will get the amount in the native currency of that country. Here are a few features and advantages of using a foreign demand draft for cross-border transfers.

  • Compared to the other options for international remittance, sending an FDD incurs a low cost. You would only have to pay the service tax and the fixed transaction fee, which is minimal.
  • Since the beneficiary’s account details are mentioned on the bill of exchange no one can forge or misuse the FDD.
  • The FDD can be issued in multiple currencies following the current foreign currency exchange rate. 
  • As per the remittance rules set by the FEMA (Foreign Exchange Management Act), the draft can be used to draw up to any amount. 

What is the Process of Sending a Foreign Demand Draft?

The most basic criterion for sending an FDD is to have an active savings account. For the rest, you would have to follow the steps below:

  • You reach out to a bank or financial service provider to send the money. 
  • The service provider would give you a form (online/offline) to enter the details of the sender and the recipient.
  • The FDD request form would require the following details; sender’s name, recipient’s name, transferrable amount, location of the transferrable amount, the mode of the payment (cash or bank account), bank account details of both the parties involved.

Once you enter all the necessary details, the FDD is remitted to the recipient. It usually takes a few days for the amount to get remitted across the border. 

Since the FDD is issued in the name of the recipient/beneficiary, it is absolutely safe to send a foreign demand draft. You can either download an FDD form or transfer it online, depending on the provisions offered by the service provider. Whether you intend to send tuition and conveyance expenses to your children studying abroad or make a loan repayment, FDD works for anything and everything. 


We hope that this write-up helped you gain some insight on foreign demand draft and how you can use the same in your cross-border transfers. On an ending note, before sending a demand draft you need to find a reliable intermediary that would liaison between you and your recipient’s account and facilitate the payment. A small tip here, you need a service provider that offers you flexible rates in terms of foreign currency exchange. If you are looking for a trusted partner to streamline your regular cross-border remittances then check out the financial services offered by Transcorp. They have multiple outlets across India, and one of the leading names specializing in outward remittances. Click here to know more and transact money with ease and safety!