In the world of one-click payment like UPI, E-Wallet and Internet Banking, the cheque is now becoming an obsolete way of payment for young customers and they tend to have doubts about the cancelled cheques. So, let’s understand what “Cancelled Cheque” is and why you still need to submit your Cancelled Cheque.
What is Cancelled Cheque.?
A cancelled cheque is one which has been crossed with two lines and the word “cancelled” is written across the cheque is called Cancelled Cheque. After this, you are not required to sign or to write anything in the cheque.
How to Cancel a Cheque?
You need to draw two parallel lines across the middle of the cheque and write CANCELLED in between so that account details are visible. without any signature.
Why Cancelled Cheque is Important?
Cancelled Cheque is a proof of account in the bank, which gives details such as account number, account holder’s name, MICR code, bank name, and branch address. Cancelled cheques are required at the time of EMI, KYC, Buying policy and for other similar purposes.
When do you require a Cancelled Cheque?
- At the time of investing in Mutual Funds, you need to submit a cancelled cheque in order to verify your account details.
- When you register for Electronic Clearance Service to verify and auto-debit the amount from your bank account you need to submit a cancelled cheque with mandate form.
- At the time of purchasing an insurance policy, the insurance provider will ask you for a cancelled cheque.
- When you apply for a Home loan, Car Loan, Personal Loan, etc the bank will ask you to submit a cancelled cheque.
- When you buy high-value products on EMI then the EMI provider will ask for a cancelled cheque.
- When you are applying for Provident Fund through offline Mode you need to submit a cancelled cheque in order to verify your account details which you have mentioned in Form.
- When you open a Demat Account you need to submit a cancelled cheque for verifying your account details.
Things you check before submitting Cancelled Cheque
- Draw two lines across the cheque, and must write cancelled on cheque otherwise it will not be accepted as a cancelled cheque.
- Do not write anything except cancelled in the cheque.
- Do not sign in the cancelled cheque.
- Only use Black or Blue ink to write in the cancelled cheque.
- In case the signature is required on the cheque leaf, obtain a statement or declaration in support.
- Before handing over the cancelled cheque you must cross-check the identity of the person.
Is it safe to give a Cancelled Cheque?
A cancelled cheque does not have any financial value and nobody can withdraw money from your account by presenting a cancelled cheque. A cancelled cheque is mostly used to verify your bank account or to set up an auto-debit process.
Cancelled cheque is safe and nobody can withdraw money from your account, but be careful while cancelling a cheque and check all the above points mentioned in the “Things you check before submitting Cancelled Cheque” before giving cancelled cheque.
We hope that now all your doubts about a cancelled cheque are cleared.