When the NIT accepts EMD in "any acceptable format", most first-time bidders default to a DD (Demand Draft). That is almost always the wrong choice for suppliers who bid regularly.
DD (Demand Draft) — quick but cash-blocked
- Cash is deducted from your account the moment DD is issued
- Refund via cheque takes 30-60 days after bid outcome
- Total cash tie-up: 60-120 days per bid
- Best for: one-off small bids where cash is not tight
FDR (Fixed Deposit Receipt) — cash-blocked but earns interest
- FD pledged in favour of tender authority
- You continue earning FD interest during the bid period
- Cash blocked for the full FD tenor (typically 6-12 months)
- Best for: mid-value bids where you want interest returns while EMD sits
BG (Bank Guarantee) — best for regular bidders
- Bank issues a guarantee to the tender authority; no cash leaves your account
- You pay only a commission (0.5-2% of BG amount per year)
- Your working capital stays deployed in the business
- BG margin (10-25%) may be blocked as security depending on your bank relationship
- Best for: any supplier bidding on 3+ tenders per quarter
MSME suppliers — you may not need any of these
Udyam-registered MSMEs are exempt from EMD on most CPPP + GeM tenders. Upload your Udyam certificate + the MSME EMD-exemption declaration format found in the NIT. That said, some large-value or capital-equipment tenders override the exemption — always check.
The forfeit risk to remember
EMD is forfeited if you withdraw the bid after deadline OR refuse the order if you win. So DO NOT bid on tenders you cannot deliver on. Forfeited EMDs also flag you as an unreliable bidder — repeat forfeitures can blacklist you across CPPP.