What is a Cancelled Cheque. Why it is Called Cancelled Cheque.

cancelled cheque: Generally, many times while taking a loan from an insurance company or a bank or the loan giving company asks you for a cancelled cheque. Apart from this, there are many companies which ask for a cancelled cheque while giving you a job.

Even though we have progressed in the digital world, this tradition continues even today. In such a situation, many times this question must have come to your mind that why is a cancelled cheque needed.
For your information, let us tell you that transactions cannot be done with a cancelled cheque. It is used only to verify your account. When a cancelled cheque is given to someone, the word cancelled is written between two parallel lines. So that no one misuses the cheque.

What is a Cancelled Cheque.

A cancelled cheque is a type of cross cheque. CANCELLED is written between two parallel lines in the middle of the cheque. You cannot withdraw money from this cheque.
However, some of your personal information is also written in the cancelled cheque. Such as bank account number, name of the account holder, cheque number, MICR code and IFSC code, which can be exploited by cyber criminals. So, in such a case, cancelled cheques should be kept carefully and safely.

Why it is Called Cancelled Cheque?

Often people call it a cancelled cheque. This is because this cheque has been cancelled. Now you cannot do any transaction using this cheque. This is only asked from you by an insurance company or a bank to verify your account. No one can use it to withdraw money, so people know this type of cheque as a cancelled cheque.

How to write a cancelled cheque?

Things to keep in mind while giving a Cancelled Cheque to a bank or insurance company. These must be followed.

• Always take a new cheque.
• Do not fill any kind of information on the cheque.
• Draw two parallel lines on the cheque.
• Write CANCELLED between the two.
• While drawing the lines, keep in mind that they do not cover any important information like account number, IFSC code, MICR code, account holder’s name, bank’s name or address.

When is a cancelled cheque required?

To complete KYC: A Cancelled Cheque is asked by a bank or an insurance company when your account has to be verified.

For EPF withdrawal:- A cancelled cheque can be asked from you even while withdrawing EPF money

For electronic clearance service:- The process of transferring money from one bank account to another is called electronic clearance service. Which is completed through a cancelled cheque.

For EMI:- If you also take a loan from a bank or loan company, then they also ask for a cancelled cheque from you under NBFC.

For demat account: Nowadays, to open a demat account, the company asks for a cancelled cheque from you. Which can verify that this account is yours.

For insurance:- If you have also got yourself insured in a bank or company. Then in such a situation they ask for a cancelled cheque from you. Only then your insurance is done. Often these financial companies ask you for a cancelled cheque for verification.

After all, what information does a cancelled cheque give?

As you have been told that the cancelled cheque works to verify your account, for which the cancelled cheque gives the following information.

• Account holder’s name
• Bank’s name
• Account number
• Bank’s IFSC code

Why is a cheque cancelled?

Cancelled cheque is often written with a slanting line. This cheque is used to verify your bank account so that no one can misuse it. Once a cheque is cancelled, after that money cannot be deposited or withdrawn from it. This is just a way to verify the account.

Cancelled cheque proves that you have an account in the concerned bank which is verified by this cheque which contains your bank details.

What is the difference between Blank Cheque and Cancelled Cheque?

Demand for Blank Cheque When you take a loan, the bank asks you for a Blank Cheque. For information, let us tell you that this is a normal cheque. Which contains information like account holder’s name, account number, ifsc code, micr.

While taking a loan from the bank, the bank makes you sign the cheque. In which no other information is filled. It is called Blank Cheque.

The bank takes Blank Cheque so that they can find out your signature. And your bank account information can be verified. Apart from this, your bank’s IFSC is found out.

While a cancelled cheque is a useless cheque. Which is used only to verify your account. Apart from this, no transaction can be done with this cheque.

Conclusion:-

As you all have come to know where the cancelled cheque is used. And why is it called cancelled cheque. Most of the banks ask you for cancelled cheque so that your bank details can be verified. Apart from this, it cannot be misused.

Because when you write cancelled on a blank cheque, the bank itself considers that cheque cancelled. In today’s blog, we have given you all the information about cancelled cheque. Which will prove useful for you.

If you liked our article, then definitely share it with your family members or friends. So that they can also get information about it.

Cancelled Cheque FAQs

How to draw a cancelled cheque?

If two parallel lines are drawn in the middle of the cheque and then the word cancelled is written in the middle, then the cheque is considered a cancelled cheque. It cannot be used in a wrong manner.

How to get a cancelled check?

A cancelled cheque is asked for by a bank or a company so that they can verify your account details.

What is an example of a canceled check?

When you get insurance from an insurance company, they ask you for a cancelled cheque. This will help them verify your bank details. That is why they ask you for a cancelled cheque.

Does a cancelled cheque require a signature?

No, there is no need to sign any cancelled cheque, it is just written cancelled between two lines. And never sign any cancelled cheque even by mistake.