What does a cancelled cheque denote
A cancelled cheque works as a proof for opening an account with a bank. You can submit a cancelled cheque in many cases to confirm your bank account details
When would you need a cancelled cheque
1. If you are investing in mutual funds or the stock market, you must open a Demat account. The company would want you to submit a cancelled cheque to open the account to verify if the bank account associated with the investment is yours in reality. The requirement of the cancelled cheque is in accordance with the Know Your Customer (KYC) guidelines. 2. Companies generally ask for a cancelled cheque when you want to withdraw your EPF money.
What is a cancelled cheque?
1. A cancelled cheque refers to a cheque that contains two parallel lines drawn across the layout 2. It is also necessary to write the term ‘cancelled’ between these lines 3. You need not make a signature on the cancelled cheque 4. The cancelled cheque will be used to gather details such as account number, account holder’s name, MICR code, name and branch name of the bank, and IFSC.
How to write a cancelled cheque?
Keep these pointers in mind if you want to write a cancelled cheque: – Take a new cheque. – Do not write any information on the cheque, such as the Payee's name, the amount, or signature. – Draw two parallel lines across the cheque – Between the two parallel lines, write "CANCELLED" in capital letters.
Sample cancelled cheque
Common questions related to cancelled cheque
1. Do I require to sign a cancelled cheque? Ans - No 2. Can I use a cancelled cheque later to withdraw money? Ans - A cheque once marked cancelled cannot be used for transactions in the future. 3. Can I use a red ink or green ink pen to cancel my cheque? Ans - Conventionally, black or blue pens are used to cancel a cheque. 4. Are there any risks involved in sharing a cancelled cheque? Ans - cancelled cheques still contain your banking information so you should be vigilant with whomever you share your cancelled cheque.