How do you write a Cancelled Cheque?

Date: 23rd September 2024 | Read time: 3.5 Minutes

Cancelled cheques are part of the mandatory paper work pertaining to most banking transactions and must be submitted with most financial operations. Thus, knowing how to write a cancelled cheque correctly will save time and avoid hassle when depositing important documents.

A cancelled cheque is a standard bank cheque marked as "cancelled". The purpose of a cancelled cheque is to authenticate your bank details but disallows the transactions. It contains critical information like the name of the bank, your account number, the branch, and the MICR code. Though the cheque is marked as cancelled, it is possible to use the information mentioned for verification purposes but for neither withdrawal nor transfers.

Writing a cancelled cheque is a pretty simple task that requires only a few steps:

1. Blank Cheque – First, take a blank cheque out of your cheque book.
2. Write 'CANCELLED' Across the Cheque – Draw two parallel lines across the cheque with a pen and write the word 'CANCELLED in between. Make it bold and clear, but ensure not to sign it.
3. Other fields need not be filled – Place date, payee name, or amount if it has been placed on the cheque.
4. No need to sign the cheque as nothing is written in it.

This way, the cancelled cheque becomes safer and doesn't fall into the wrong hands for any false verification purpose.

Cancelled cheques are asked for by some numerous reasons, amongst them being:

• Setting up ECS – At the time of fixing the automatic payments for bills or salary credits, businesses may ask you to provide a cancelled cheque as proof of your bank details.
• Loan Application – The banks while applying for loans like home loans or even personal loans ask for a cancelled cheque to confirm the account details for payout purposes.
• Investment Accounts – After opening mutual funds or demat accounts, the respective investment account seeks a cancelled cheque to bridge that investment account with your bank account.
• KYC Verification-It is used in the Know Your Customer process for authenticating the information about your account, especially by service-providing financial institutions.
  
   

This is an important document as it gives a basic verification for the account information. All financial institutions and service providers require cheques from their clients for verification purposes of correctness in account details. Since across the cheque it has "cancelled" written on it, no one can misuse that cheque for unauthorised transactions, hence it is safe to carry out verification of accounts.

[Also Read: How to write a cheque?]

There is no facility available at this moment to print a cancelled cheque online. You have to write a cancelled cheque and cancel it manually by writing the word 'CANCELLED' across it, while inside your cheque book. However, for certain financial services, the online submissions will allow a scanned copy of a cancelled cheque if this is especially requested. A cancelled cheque is a simple yet powerful document playing an important role in various financial processes. This becomes even simpler and safer with the knowledge of how to write a properly presented cancelled cheque and what its uses are. Be it loans or investments or any KYC requirement, the issue of the authenticity of account details without risking misuse is well set with the help of a cancelled cheque.