Cancelled Cheque - What Is It? When Do You Need It?

A cancelled cheque is an unused cheque crossed with two parallel diagonal lines with the word 'CANCELLED' written between them. It serves strictly as a non-transactional proof of an existing bank account for third-party verification.

Key Highlights

• Security Rule: Do not sign or write on a cancelled cheque.
• Information Provided: Shows your name, account number, IFSC, and MICR code.
• Uses: Required for KYC, investments, insurance, EMIs, ECS mandates, and EPF withdrawals.

What is a Cancelled Cheque?

A cancelled cheque is a cheque with two parallel lines drawn across the layout. It is also necessary to write the term ‘cancelled’ between these lines. 

• You need not make a signature on the cancelled cheque. 
• 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.
• 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. 
• Once it is cancelled, the cheque cannot be used as an authorisation for the removal of additional funds from the payer’s account.

What does a Cancelled Cheque Denote?

A cancelled cheque is used as proof of an existing bank account by third-party services such as insurance, investment, or loan providers.

When would you Need a Cancelled heque?

You may have to submit a cancelled cheque in the following cases:

How to Write a Cancelled Cheque?

Follow these steps to correctly write a cancelled cheque:

• Take a fresh, unused cheque from your cheque book.
• Draw two clear, parallel lines diagonally across the cheque.
• Write the word ‘CANCELLED’ in capital letters between the lines.
• Do not sign the cheque or fill in any other details.
• Make sure the cheque displays your name, account number, bank name, branch, IFSC, and MICR code clearly.

This format ensures the cheque is valid for verification but cannot be used for any financial transaction.

Related Articles:
1. What is Account Payee Cheque & How to Write It? 
2. What is a Post Dated Cheque
3. What is Account Payee Cheque & How to Write It?
4. What is MICR Code on Cheque
5. How to Fill Cheque
6. How to Write a Cancelled Cheque?
7. Cross Cheque - Meaning, Types and How to Cross Cheques?