How does cancelled cheque looks like

If you wish to cancel a cheque because of any error that you might have made in the cheque, you can start from step 2 of the process as mentioned above. Nobody can withdraw from a cancelled cheque, but many fraudulent activities can occur even while misusing cancelled cheque.

When you provide someone with a cancelled cheque, ensure that you do not put your signature on it, and also ensure that you hand it over to the proper person in charge of collecting it to be on the safer side.

How to cancel a cheque? What are some of the instances where cancelled cheques are required? Cancelled cheques are useful in several occasions wherein it is a part of the formalities to be completed for a few procedures like KYC, EMI process, ECS, while opting for an insurance policy, while opening a Demat account, for withdrawing PF and for opening bank accounts.

Will my bank cancel a cheque in case I request them? A bank cannot cancel your cheque, but if you do not have a cheque leaf for your bank account, the bank will provide it, and you can pick a new cheque and cancel it if you need. However, you must know what a cancelled cheque signifies and the situations a cancelled cheque can come handy.

A cancelled cheque refers to a cheque that contains two parallel lines drawn across the layout. You need not make a signature on the cancelled cheque. In a different context, a cancelled cheque is a cheque for which payment has already been done. The moment cash is drawn with a cheque, the bank marks it as cancelled. 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. Some are now okay with scanned copies too.

Even those who use Aadhaar-enabled eKYC, need to do the complete KYC process—verified by physical documents—to be able to invest more than Rs50, in a year. If you invest in mutual funds through a systematic investment plan SIP , or want to pay the equated monthly instalments for a loan from your savings bank account; you will need to use the electronic clearance service ECS.

This service allows money to be auto-debited from your account every month to service the SIP or loan, for example. Enabling this service also requires a cancelled cheque. Similarly, while opening a demat account, which you need for buying or selling stocks, a cancelled cheque needs to be submitted to the brokerage along with the account opening form and other KYC documents.

Another common use of the cancelled cheques is while making an insurance claim, especially in term-life insurance, group health policies and motor insurance. As pointed out earlier, we may go about our lives using all kinds of e-payment methods but we still need to know how to use a cheque, a cancelled to be precise.

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