Cheque
A cheque is an unconditional order addressed to the bank that orders it to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued.
Pay Order (Also called Banker’s cheque/ Cash Warrant)
Pay Orders are issued to customers for transactions within the bank and within the country only. Before issuing the Pay Order the customers’ money is parked to the bank’s account. It is not necessary for a person to maintain bank account to avail Pay Order.
Demand Drafts
This types of cheque is issued by a bank to help customers withdraw money from another bank, both within as well as outside the country. The customer’s money is deposited in bank’s account prior to issuing this kind of a demand draft; this transaction does not necessitate the customer to have an account at the bank.