What defines a demand draft?

A demand draft is defined as a financial instrument that is payable upon presentment. This means that the payment is due immediately when the draft is presented to the bank, without any delay or requirement for a specified future date. This characteristic makes demand drafts a convenient method for transferring funds, as they do not have a waiting period and can be cashed as soon as they are presented.

In contrast, the other options refer to different types of financial instruments. For instance, one describes a draft that is payable at a specified future date, which would correspond to a time draft, not a demand draft. Another choice mentions a draft used in foreign transactions—demand drafts can be used in such contexts but are not exclusively defined by this use. Finally, the description of a draft that cannot be transferred pertains to non-negotiable instruments; however, demand drafts are typically negotiable. Thus, the defining feature of a demand draft is its requirement for immediate payment upon presentment.