Even in today’s time, many people do not know what are the uses of a canceled cheque. Today in this article, we will discuss some brief information about cancelled cheques.
Friends, most of you have opened a savings account in various banks of the country. All of you keep your savings money in banks and at the time of need, you Withdraw, Deposit or Transfer this money from your savings account through ATM Card, Online Banking, UPI Address, etc.
If we talk about Transaction of Small Amount, then through ATM Card, Online Banking, UPI Address, etc., we are able to do this easily. But if we talk about transactions of thousands or millions of rupees, then we have to use Cheque for this.
Most of us will have used the cheque, but there will be many people who will not know about cheque. Apart from this, there will be many people who even today would not know about the canceled cheque at all.
Apart from this, through this article you will get complete information about various uses of cheques, the need for Cancel cheque, precautions to be taken while issuing a cancellation cheque, etc.
Complete information of Cancelled Cheque
In today’s time, most of you do transaction work every day, in many cases you will also be asked for a cancellation cheque. Most of the time you open a new bank account, you are asked for a cancelled cheque of another bank account for verification.
Even after doing so much, we do not really know about the cancellous cheque, let us tell you about the canceled cheque.
What is a Cancelled Cheque
A canceled cheque is a common cheque on which CANCELLED is written by the Account Holder in CAPITAL letters of ENGLISH between two slanting lines. Apart from this, no signatures are made in the cancellation cheque by the Account Holder. Account Holder can create and cancel the cheque of any bank like SBI Bank, HDFC BANK, PNB BANK.
You can use the normal cheque of any bank for making a Cancel cheque. So friends, you must have understood by now that What is Cancelled Cheque. Let us now try to know in this sequence, why and when a cancelled cheque is required.
What is the use of a Cancelled Cheque?
This is a good question. Now you know what a Cancel cheque is, but till you do not understand its uses, then there is no benefit from knowing about it. So let’s know why a Cancelled cheque is important-
- Open Bank Account
- All Types of Bank Loan
- Open Demat Account
- Payment Receiving
- Insurance Policy or scheme
- For KYC
- ECS System
- EPF Withdrawal
1. To Open Bank Account
If any person wants to open his new bank account in any other bank, then that person is asked for the cancellation cheque by the bank.
2. For All Types of Bank Loan
Often all of you take loans from banks to fulfill your needs. Generally we all like to take many types of loans like home loan, vehicle loan, education loan, etc.
You are given a loan by the bank, but the bank takes the Cancel cheque at the beginning of the loan from you for timely repayment through its installment EMI. That is, during a bank loan, the cancel cheque asks for verification of your account.
3. To Open Open Demat Account
All of you plan to invest in the Share Market, as well as many people will also be investing in it. Under Share Market, if you want to invest in Mutual Fund or Stock Investment. So you have to open your Demat Account. For this, you are requested to cancel cheque for KYC under document verification.
4. Payment Receiving
If you need payment from a company or firm, then that firm or company demands a cancellation cheque from you for verification of your account to make payment to your account through online.
5. For insurance scheme
Often, individuals take an insurance policy based on their needs and future planning. Whenever you take an insurance policy, during that time you are demanded a Cancel cheque.
6. For KYC
The full name of your KYC is in your cancelled cheque. This means that whenever a transaction comes up, the person in front asks for a cancellous cheque from you under KYC to get information about you.
7. ECS System
The full name of ECS is Electronic Clearance Services. It is often used for depositing monthly installments, such as Monthly Investment in Mutual Funds from your bank account. For verification of this bank account only, you are asked for a Cancelled cheque.
8. EPF Withdrawal
Monthly installments for the retirement of private sector employees are deposited in the EPF Retirement Fund itself.
After retirement, when an employee applies to withdraw his EPF retirement fund, the Cancel cheque is demanded for his account verification.
Information on Canceled Cheque
You have never noticed, in fact, a cheque or cancelled cheque contains many hidden information. If you look carefully, you will get the following information in the canceled cheque –
- Account Holder Name
- Bank Name
- Branch Name
- IFSC Code Number
- MICR Number
- Cheque Number
How to Make Cancel Cheque
If you have a savings account in any branch, then you should first issue a cheque book on the same account. Only after this, the person will be able to make a cancel cheque. Let’s know, how to make cancel cheque from the following step-
- Step 1: The account holder should use a fresh cheque from his cheque book. Make sure that there is no wrinkle on the cheque.
- Step 2 : Now on this cheque, the account holder should draw two slanting lines between the cheques.
- Step 3: After drawing the slant lines, the account holder should write CANCELLED in English capital letters between the two slanted lines.
In this way, a simple cheque can be converted into a cancelled cheque by anyone with great ease.
Safety Measures For Cancelled Cheque
In the present time, most people are falling prey to fraud, in view of this, a person should take the following precautions while making a cancel cheque.
Safety Measures For Cancelled Cheque
- Do not sign on any type of Cancel cheque you have created.
- Before issuing a cancellation cheque, make sure that your cheque is not misused.
- Use only blue or black ball point pens while making a Cancel cheque.
- Always, after issuing a Cancel cheque, keep complete information about the person or organization to whom this cheque has been issued, so that no fraud can occur with you.
In this article, we have given you information about Cancel Cheque closely, so that you must have understood what is a cancelled cheque, how to make a cancel cheque And what does it work for.
How did you like the information given in this article and how useful it was for you, we must comment.