You may already be familiar with what a check or cheque is, but you may be wondering why at some places you are required to attach or hand in a cancelled check. Correct? Well, in today’s post we will be explaining what a cancelled check is, why it is required, and how to write a cancelled check properly. So let’s begin.
What Is A Cancelled Check?
A cancelled Check is simply a check that can no longer be used to instruct a bank to pay a specific amount to the check bearer. The only use of a cancelled check is to prove that you have a bank account.
When Cancelled Check Is Required?
In the following scenarios you may need a cancelled check:
- Before everything was digital, people used to physically go to the brokers and used to open a Demat account that way. And if you want to invest in mutual funds or the stock market, then you must provide a cancelled check as proof, which indicates that you have a personal bank account in a trusted bank in India.
- Whenever opting for an insurance policy, you’d be required to submit a cancelled check along with other necessary documents.
- In order to withdraw EPF money, companies require their employees to submit a cancelled check.
- Private and non-banking financial services providers also ask for a cancelled check, especially when you are signing up for EMI cards or any loan scheme.
The Importance Of Cancel Check
As we have already mentioned earlier, a cancelled check works as proof that you already own a bank account. Since a cancelled check has information like your account number, payee name, MICR & IFSC code, check number, bank name, bank branch, etc. And this way it is much easier for the other party who’s asking for a check to verify and collect your bank-related details. However, since it is a cancelled check, it can not be used to withdraw money from your bank account. But still, you should always hand a cancelled check to someone credible.
How To Write A Cancelled Check?
Writing a cancelled check is no rocket science, even a kid can do it. But you must do it correctly to ensure that your cancelled check cannot be further used to withdraw money from your bank account. Let’s now talk about how you can do that.
- First of all, take a brand new check from your chequebook, but make sure you don’t sign anywhere on the check itself.
- Now, make two lines diagonally on the centre of the check, but keep some distance between those two lines.
- Now, just write “CANCELLED” in capital letters in between those two lines you have just made on the check. Try to write the word cancelled as big as you can.
And that is it. You have just written a cancelled check on your own, and you can use it where it is required. But make sure that you don’t fill in any amount or sign your signature on the check itself.