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.
Contents of this post
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.
Faqs on Cancelled cheque (cancel a cheque)
- Should I issue a canceled Cheque?
You may provide a canceled cheque to anyone else for your bank details, in case of a loan, proof of bank, etc.
- When should I give a canceled cheque?
You can give a canceled cheque if required as proof, for RTGS details, in case of banking requirements.
- Should I sign a Canceled cheque?
No, You should not sign a canceled cheque for providing anyone else.
- When a canceled cheque can be cleared?
A canceled cheque can be cleared by someone else if it is signed by the drawer or if the cheque is misused by erasing canceled words and parallel lines.
- Is cancellation allowed on cheques?
Yes, you may cancel a cheque if it is required by someone for bank details or any other purpose. But a canceled cheque can not be used for Payment to someone.
- Should I give the original canceled cheque?
Yes, if demanded original canceled cheque otherwise you may provide a copy of the canceled cheque, can be provide a soft copy in case of bank account details required.
- What happens if I cancel a cheque?
After the cancelation of a cheque, that cheque is not usable for any payment but it can be used for other various purposes which are given above.
- How much does it cost to cancel a check?
No cost is required to spend for the cancelation of a cheque. You need to follow the above-given steps to cancel or online cancelation of cheque process.
- Can we cancel the cheque by pencil?
You should always use a black or blue pen to cancel/write a cheque, no other colors are acceptable by the banks, NBFC, and others.
An Accountant, GSTP, GST blogger, Website Creator, SEO Builder & Co-founder of the website https://gstportalindia.in for the help of GST Taxpayers of India. Having a perfect accounting experience of more than 10 years in a Private Ltd Company.