Once you create (Demand Draft) DD, the amount will be deducted immediately from your account. If for any reason, you want to cancel the DD and want to get the deducted money back into your account, you must have to go to bank. There is no online facility in any banks in India to cancel the DD.
If you already have original DD, there can be two cases.
1- You got the DD by paying cash- If you got the DD by cash deposit, you need to submit original DD as well as receipt of cash payment. Amount will be refunded to you in cash immediately with some deduction of amount in the range of around Rs 150.
2. If you paid the amount of DD from your account- In this case you just need to submit original DD with filled cancellation form. Amount will be credited back into your account with some cancellation charge of around Rs 150.
If you don’t have Original DD with you (you may have lost the DD in your home or it may get lost in postal service etc), then the process of refunding or cancelling the DD it tough work, that’s why check have got better preference to pay other people.
To cancel the DD and if you don’t have the original DD with you, you need to sign Indemnity bond in stamp paper for the bank. After that, most of the bank refund the amount with taking some time i.e within one week, but some bank will take time till expiry date of DD. Its not a big problem now as the DD is valid only for 3 month in India.
There will not be any automatic credit back / refund of DD amount into you bank happen in any banks in India. To get the money back even after expiry you need to submit the application in the bank .
Whenever you receive the Demand Draft, the first you need to do is keep the photo copy of the DD or scan copy of DD, and aslo keep the payment voucher of application form of DD in safe way.
Demand Draft is very good option of payment only if it will not get lost.