when a bank prepares a demand draft the amount of the draft is taken from the account of the customer requesting the draft and is transferred to an account at another bank the drawer is the person requesting the demand draft the bank paying the money is the drawee the party receiving the money is the payee demand drafts were originally designed to benefit legitimate telemarketers who needed to withdraw funds from customer checking accounts using their bank account numbers and bank routing numbers 
for example if a small business owner purchases products from another company on credit the small business owner asks his bank to send a demand draft to the company for payment of the products making him the drawer the bank issues the draft making it the drawee after the draft matures the owner of the other company brings the demand draft to his bank and collects his payment making him the payee because a demand draft is a prepaid instrument payment cannot be stopped whereas payment of a check may be denied for insufficient funds process of obtaining demand draftto obtain a demand draft choose the issuing bank or financial institution from which you want to obtain the draft if you re not an account holder visit the bank branch and provide additional identification and documentation you ll often have to fill out an application form with the required details including the amount to be paid the name of the payee and other relevant information the bank often asks you to provide supporting documents such as proof of identification and address this complies with know your customer kyc regulations after you pay the required fees you ll receive the demand draft in your name with a unique draft number printed on special security paper 