A cheque is a written document which orders a bank to give the written amount to the person whose name is written on the cheque. A cheque has different columns where various details are written. Earlier, people used to carry a lot of cash. This was risky as there were chances of robbery.
Cheques made our life easy as they made the transactions of larger amounts easier. Even today, when everyone prefers digital payment methods, cheques are still used. But, the cheque in itself has much information. If you have ever tried to read the cheque, you might have found many details like date, amount etc. These details are written on the cheque to avoid the chances of fraud. The cheques have evolved very much.
If you compare the first cheque and that of today, you will find many differences. Today, we are going to discuss cancelled cheques and various details related to them. Further in the article, you will learn about how to write a cancelled cheque.
What do you mean by Cancelled Cheque ?
A cancelled cheque is a cheque on which has two parallel lines and the word cancel as written. This simply means that the cheque is of no use now. You cannot take this cheque to the bank and ask them for cash. But this doesn’t mean that you don’t have your account in the bank now. You still have your account and you can still write a new cheque.
Cancelling a cheque simply means that you don’t want to use that cheque now. It is important to cross using the parallel line and write cancel on the cheque to avoid any type of fraud.
A cheque has various details regarding bank, date, amount, bank etc. You can simply take a cheque and find these details written on it. There is information related to the person writing the cheque and the person receiving the cheque.
Here is information that you can find on any cheque :
• Date– On the cheque, you will find a section where you have to write the date on which the recipient can do the transaction and take money from the bank. In case, you want to postpone the date of the transaction, there is a different process for it.
• Bank– A cheque book is issued to you by a bank when you have an account in that bank. On the chequebook, you will find the name of the bank written clearly. Using this information you can easily know the name of the bank. Without having a bank account, you cannot get a chequebook from any bank.
• Your name- Suppose, you are the one to whom the cheque book is issued and you are writing the cheque. There will be a column where you have to provide information regarding yourself. You must write your name in the respective column.
• The recipient- Apart from your information, you will find a section on the cheque where you have to write the person’s name at home you are writing the cheque. You must write the name correctly as it is one of the important pieces of information available on the cheque.
• Cheque number – It is simply the number of the cheque. But wait, you can write it off your choice. When you get a cheque book from the bank, each cheque of the cheque book has a serial number. The cheque number simply refers to the serial number of the cheque. Take one cheque and you can easily find the cheque number.
• Signature– one of the most important parts of the cheque. It is the signature of the person who has an account in that bank. The signature should match the one registered in the bank with your account. If the signature is found different, the person taking the cheque to the bank can get in trouble.
• Payment amount- So far, we have discussed various details related to the cheque. The payment amount is simply the amount which will be withdrawn from your account. You have to write the amount in both numbers and words. There should be no mistakes while writing it.
• Account number – You can get this term by its name only. It simply refers to your account number. It is already written on the cheque. It is the account number that you have in the bank which issued you the chequebook. You can find it on every cheque in your cheque book.
So, these were some important details which you can find on any cheque. The cheques of different banks may differ in colour or something else but the above details will be available on every cheque. You can check this by comparing cheques of different banks.
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Example of Cancelled Cheque :
Assume a situation, where you are a CEO of a mobile company. After a meeting, you decide to install some new systems in your company. You choose a company for the installation of those new systems. For this, you write a cheque of 5 lakhs for that installation company which you have to give them in next meeting.
But after some time you get to know that the installation company isn’t good. You decide to break the deal with them but you have already written a cheque. Well, you can simply cancel this cheque by drawing two lines and writing cancel on it.
After this, no one can use that cheque and you can simply avoid any situation of fraud. There are situations when people first write a cheque but due to some unavoidable reasons, they have to cancel the cheque.
What will happen if the cheque isn’t cancelled? Suppose you don’t cancel a cheque, instead just keep it somewhere safe. Well if someone steals it, they can easily cash it since it has all the information required for successful transactions. This can be dangerous so, always cancel the cheque if you don’t need it further due for any reason.
How to write a Cancelled Cheque ?
Have you messed up writing the cheque or do you want to cancel your written cheque due to any unavoidable reason? Well, we all go through situations when we wrote a cheque for some genuine reason but now we have to cancel it due to some issues.
Trust me, cancelling a cheque isn’t that tough. To cancel a cheque, you have to draw two paralel lines. There, you have to write the word cancel. This way you can cancel any cheque. That will be of no use now and there will not be any chances of fraud done using it.
But, never leave a useless cheque anywhere without cancelling it. If anyone gets your cheque and it isn’t cancelled, they can use it and get money from your account which can be very dangerous.
Therefore, if you have a cheque filled with all details, always keep it safe somewhere so that no one can take it. Some people are always waiting for such moments when they can trick people and do the fraud them. Once you cancel the cheque, you don’t need to worry more. Now, there is no chance of fraud and you are safe.
Uses or Purpose of Cancelled
Till now, we learned many things related to cancelled cheques. But is there any way when the cancelled cheque is useful?. Yes, there are some situations where a cancelled cheque is useful. At some places, you will be asked to present the cancelled cheque. Here, we have listed some requirements for cancelled cheques.
• For KYC – At some places when you have to do KYC, you will be asked to give a cancelled cheque. Well, this demand is made as a part of identification purposes. You have to present one of your cancelled cheques there. This way, even your cancelled cheque will be useful.
• While opening a savings account- Suppose you want to open a new savings account. When you will go to the bank and ask them for the same thing, they might ask you to present a cancelled cheque. Well, this is also done as a part of the identification of the person who wants to open a savings account.
• While opening a Demat account – As we already discussed above, similarly you might be asked to present the cancelled cheque when you go for opening a savings account. This is also done as a part of the identification of the person who wants to open their Demat account.
• EMI – We have several types of loans like car loans, home loans etc. The loans are paid in EMI form. For this, even some banks can ask you for a cancelled cheque for identification purposes. After that, they will allow you to pay the loan using EMI.
Apart from these, there are several such ways by which even you cancelled cheque can be helpful. At many places, you will be asked to present the cancelled cheque as a part of identification. Therefore always keep your cancelled cheque safe.
Although once a cheque is cancelled, there are fewer chances of fraud but still, you should not throw it anywhere. If you are giving it to someone so that they keep it safe, be sure that the person is trustworthy. Never give your cancelled cheque to someone randomly.
Anyone may use it against you as today there are so many scams going on. It is always said that prevention is better than cure. So, it’s better to take precautions so that you don’t get into any fraud in future. Therefore, always keep the cancelled cheque someplace that’s safe or handle it to someone trustworthy.
What is a Cancelled Cheque Leaf ?
We have discussed so many things regarding Cancelled cheques till now. We started the article by introducing the cancelled cheque and learnt about various details related to it. Now, we can say that a cancelled cheque is simply one which has two parallel lines drawn with cancel written on it.
We even saw how we can use the cancelled cheque. Here, some steps are discussed which will help you in writing a cancelled cheque. You just have to follow these steps snd you can easily write a cancelled cheque.
• Step one – Take an unused cheque from your chequebook. Don’t fill any columns of the cheque.
• Step two- Draw two line such that are parallel.
• Step three- Between these parallel lines, you have to write the word “Cancel”. Now, you are done with writing a cancel cheque.
• This process is used when you are writing a cancelled cheque due to some important purpose. But let’s take a situation when you messed up writing a cheque and now, you have to cancel it. Then, you have to follow the same procedure but from step two. On the cheque draw two lines that are parallel. Between these parallel lines, you have to write the word “Cancel”. And your cheque is cancelled now.
Considering the above steps, we can say that we have cancelled the cheque in two situations.
Situation one :
In this case, we need a cancelled cheque for some important work for identification purposes. You will be asked to give the cancelled cheque when you went for opening a savings account or Demat account. In this situation, our cancelled cheques are safe as the bank has kept them with them. They will take responsibility if any fraud happens due to this.
Situation two :
In this case, you did some mistake while writing the cheque as now you want to cancel it. Well, the process of Cancelation is not tough. You can easily do it using the steps discussed above. But remember, the cancelled cheque must be kept safe as some scam can be done by the fraudsters.
Therefore, it is said that always keep your cancelled cheque safe. Don’t give it to any random person. Once the fraud is done, you have to suffer too much so its better you take precautions previously. You can keep the canceled cheque in locker or at any place where you think no one can take it.
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