What is A Cancelled Cheque?

A Cancelled Cheque is a cheque leaf that is crossed with two parallel lines and a term “Cancelled” written in between those lines.  As the name suggests that the purpose of the Cancelled Cheque is to provide the user with a KYC Document which tells that you have a bank account with you.

How to Issue a Cancelled Cheque?

what is a cancelled cheque

It is very simple to issue a cancelled cheque. This can be done by Drawing two parallel lines and writing the term “Cancelled” in between those lines. You do not have to mention any other details or Sign it. It is necessary to follow that in a cancelled cheque, you need to write Cancelled Cheque only and nothing else.

What Information does a Cancelled Cheque Contains?

A Cancelled Cheque contains various details which tell us about the details that a KYC document must contain. The following are the details that a cancelled cheque contains

  • Account Holder’s name
  • Bank account number
  • IFSC
  • MICR
  • Name of the bank and branch details

Use of Cancelled Cheque

Cancelled Cheque is used on various financial areas where the KYC is required with your bank account. The following are the list of bank uses of the Cancelled Cheque

  • It is used to setting up ECS (Electronic Clearance Service) that automatically deducts the amount on monthly bases
  • For buying the insurance policy, a cancelled cheque is asked by the Insurance agent while availing the policy.
  • For loans and other credit facilities like EMI scheme, a cancelled cheque is required
  • To withdraw the PF, companies generally ask for a cancelled cheque with your name on it to validate your account details.
  • Most of the investment firms will ask for a cancelled cheque so that it can be verified that the account belongs to you.
  • A Demat account can also ask for the cancelled cheque when you want to invest in the stock as a KYC Document.

FAQ on Cancelled Cheque

Q. Do I need to mention the date on the cancelled cheque?

Ans. No, you do not have to mention a date on the cheque

Q. DO cancel Cheque can be used to debit money from account?

Ans. A cancelled cheque cannot be used to debit money from your account.

Q. Do I need to sign a cancelled Cheque?

Ans. Never sign a cancelled cheque

Q. Can we use same cancel cheque multiple times?

Ans. Yes , you can use the same cancelled cheque multiple times.

Q. Can Cancelled Cheque be used for processing any transaction?

Ans. No, cancelled cheque cannot be used for any kind of transactions.

Q. Is it safe to provide Cancel Cheque?

Ans. A cancelled cheque can not be used in bank for transaction purpose but before giving someone the cancelled cheque, make sure that cheque is cancelled properly and could not be overwritten.

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