Cancelled Cheque Decoded: Meaning, Uses, Purpose, and Tips!
Caught by a cheque that does nothing? Give it a Thought Again!
A Cancelled Cheque might seem to be just a crossed-out slip – but it empowers the BFSI sector to verify KYC details, set up salary accounts, submit loan applications, etc. This cheque is a stepping stone to boost these active processes.
This article will walk you through a complete breakdown of what a cancelled cheque is, the purpose it serves, the image, and more. If you are asked to submit one and don’t know what’s the reason- this expert manual has got you covered.
Let’s decode the value of this crossed paper here!
What is a Cancelled Cheque – A Quick Overview!
You can’t cash it, yet it isn’t useless!
A cancelled cheque is a leaf from your chequebook that has two parallel lines drawn across it with the word “CANCELLED” written in between. It holds no monetary value and cannot be used for transactions. However, this makes it all the more important, as the cancellation ensures it can’t be misused while still displaying essential bank details.
While we deep dive more into the topic, scroll below to see the cancel cheque image.
Cancelled Cheque Example- Here’s How it Looks!
Cancelled Cheque Format- Components It Covers!
- Bank Name
- IFSC Code, MICR Code
- Account Number
- Account Holder’s Name
Why Is Everyone Asking for Cancelled Cheque Sample? Find Out Here!
- It’s proof to be submitted for issuing an insurance policy, to withdraw PF, and to create a new Demat account.
- The organization you are employed with asks for the cheque to ensure correct bank details are entered for salary purposes.
Sharing a Cancelled Cheque? Avoid These Red Flags!
- Make use of black or blue pen; other inks are forbidden to cancel a cheque.
- Once the cheque is used, shred it into pieces, preventing its misuse.
- If you wish to use it several times, treasure it securely.
- Until the time and date on the cheque are valid, it is susceptible to fraud. Details like the account number, IFSC code, and MICR code—if exposed carelessly—can increase the risk of financial fraud or unauthorized access.
3 Easy Steps to Write a Cancelled Cheque- Master the Basics!
- Detach a fresh cheque leaf from your chequebook
- Draw two parallel lines across the cheque
- Write the word “CANCELLED” between the two lines, aligning it parallel to them. All the letters should be in the upper case.
Stop Right Here! If You Are About to Make These Below Mistakes?
- Keep the cheque blank before you cancel it. While you submit the cancel cheque image, make sure it doesn’t have your signature or other details. This is a precautionary step to prevent frauds like money withdrawals or bank account scams.
- Important elements on the cheque, such as the IFSC code, MICR code, bank address, account number, and the name of the account holder, must be clearly visible and unobstructed.
- Submit the cheque only to the appropriate official to forbid its misuse.
Lost the Scratched Cheque? Stay calm — here’s How to Handle the Situation!
Use Cases of a Scratched Cheque: Why You Need One?
- Submitting a cancelled cheque image is often required when opening a new bank account.
- Applying for a loan requires a cheque, which is cancelled.
- Buying on EMI? You need to provide the scratched cheque.
- Inventing mutual funds needs KYC verification, which can be done only through the details on your cheque.
- EPF authorities may request a cancelled cheque to verify your bank account and confirm your identity.
- In the case of electronic clearance service, it is needed to automatically deduct money from your account.
- Insurance policies like health, term, or others need the cancel cheque images.
- Updating KYC for stock investments and MFs and cheques with crossed lines becomes crucial.
Read More: How to Manage Business Expenses Efficiently
Why Is Signature Not Necessary on a Cancelled Cheque?
- Scratched cheques are the gateway to verify details and not for payments.
- They don’t carry any monetary value and can’t be deposited in the banks.
- They just provide account information and are not made to authorize payments.
Tips to Minimize Frauds with Cancelled Cheques?
- Use a dark ink pen to write “CANCELLED” so that it stands out and is easily readable
- Make sure to cross out the cheque in a way that prevents any fields from being filled in or misused.
- The important information on the cheque must be easily readable.
- Keep an organized and clear record of cancelled cheques, noting the cheque number, date, and reason for cancellation.
- Once used, securely dispose of the cheque by tearing it into tiny pieces.
- Stay updated about the banking security practices and trends to be followed.
Let’s Wrap Up!
A cancelled cheque probably looks just like a scratched paper but clutches the power to unfold a horizon of financial facilities with precision and security. From KYC verification to securing investments and loan approvals, this small document plays a vital role in ensuring a smooth financial process.
It doesn’t carry cash value, and no transactions can be made- but it has great power to drive your financial processes. Therefore, it must be handled with care and attention.
All set to take control of your financial processes? If you have more queries, connect to our experts right away!
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FAQs on Cancelled Cheques
1. Can I download the cancel check image online?
No, you can download and submit the cancel check image downloaded online.
2. Can a cancelled cheque be used again?
A cancelled cheque sample can’t be used for transactions but can be leveraged for verification of bank account details.
3. What is the proof of the cancelled cheque?
Copies of the scratched cheque can serve as a proof document.
4. How to write a void cheque for cancellation?
On a blank cheque, write “VOID” in upper case in the place where you will be entering the company or the person’s name.
