A demand draft is also known as a remotely created cheque or a tele-cheque, is a cheque created by a seller with a buyer's chequing account number on it, but without the buyer's signature. Instead of the signature, the cheque has verbiage such as "authorized by depositor (the buyer), lack of endorsement guaranteed by XYZ Bank". The seller deposits the cheque into his or her bank account, and the cheque then clears out of the buyer's account.