How to cancel a cheque? (cancelled cheque)

To cancel a cheque, There is a simple way that can be used to cancel the cheque at the time of giving the canceled cheque as security or for another purpose. It is observed that sometimes you will be asked to provide a canceled cheque in case of a loan, online fund transfer and for bank confirmation, etc.

Now, you should think before providing a blank cheque to someone else that should give or not and if should give and what should you do for safety. So through this post, we will understand more about how to cancel a cheque for safety purposes.

What is a cancelled Cheque?

A cancelled cheque is a cheque that has been crossed with two lines and the word “cancelled” or “canceled” is written across. It’s proof that the individual maintains an account with the bank. Except for this, you do not need to sign or write anything on the cheque.

Canceled cheque images and format

How should I cancel a cheque?

These are the point to remember while canceling a cheque. It is not difficult to cancel a cheque and not required more information to fill out. You can cancel a cheque with a pen easily.

1. First of all, You need to Take a new fresh cheque.

2. Make sure, Do not to fill in any information on the cheque, such as the Payee’s name, the amount, or signature.

3. And then, Across the check, draw two parallel lines.

4. Then Between the two parallel lines, write “CANCELLED” or “Canceled” in capital letters.

5. And before giving a cheque to someone just ensure that the parallel lines do not hide any vital information, like the account number, IFSC code, MICR code, account holder’s name, bank’s name, or location.

6. the Last step, You should also stop that canceled cheque online login by internet banking for misuse of the cheque.

When have you required a canceled cheque?

A canceled cheque can be used for many purposes. A few of the purposes for which a canceled cheque is used are:

1. Bank details information-For providing Bank account details to someone for payment.

2. In the case of Loans– EMI options are present in various loans, including car loans, education loans, home loans, etc. The bank or the company concerned would require a canceled cheque for completing the formalities to assign such monthly payment methods.

3. Know Your Customer (KYC) – Cancelled cheques are useful for different procedures of KYC.

4. EPF withdrawals – A canceled cheque is required to be submitted while withdrawing money from the EPF to verify the account details of the person who withdraws.

5. Financial account openings – While opening an account in society, a canceled cheque is required to be submitted for the process to be completed.

6. Insurance Policy– While opting for an insurance policy, some organizations require a canceled cheque from the person willing to purchase such a policy.

7. Demat Accounts – A Demat account is used to hold shares by individuals in an electronic form, and at the time of opening a Demat account, a canceled cheque along with a form for opening the account and other KYC documents such as proof of identity, proof of address, etc. need to be submitted to the stock brokerage.

8. Electronic clearance Services (ECS) – ECS is an electronic mode in which funds can be transferred from one bank account to another. If you set up an ECS from your account, then there would be a deduction of money from the account every month, and for this deduction, the bank would require a canceled cheque from you.

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