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

By Rucha Khedkar

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Updated on: May 19th, 2025

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2 min read

A cancelled cheque is a cheque crossed with two parallel lines and the word ‘CANCELLED’ written between them. It contains essential banking details like the account holder’s name, account number, IFSC, and MICR code. Understanding what is cancelled cheque, when it's required, and viewing a clear cancel cheque image can help in completing various financial and verification processes without errors.

What is a cancelled cheque?

A cancelled cheque refers to a cheque that contains 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 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.

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.

When would you need a cancelled cheque?

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

  • Mutual Funds: 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.
  • EMI: Equated Monthly Instalments (EMI) is the most sought after method of payment when you are buying a gadget or a high-value item. Individuals pay monthly instalments even in the case of loans such as car loan, home loan, education loan, and personal loan. To initiate the process of monthly instalments, you must submit a cancelled cheque as proof of having a bank account.
  • Electronic Clearance Service: An electronic clearance service automatically deducts money from your account every month for any transaction you have done. In this case, you must set up the electronic clearance service.
  • Provident Fund Withdrawal: Companies generally ask for a cancelled cheque when you want to withdraw your EPF money.
  • Insurance Policy: A cancelled cheque is required even when you are purchasing an insurance policy.

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?

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Frequently Asked Questions

What is an Account Payee Cheque & How to Write It?

An account payee cheque is a cheque that can only be deposited into the payee’s bank account. To write one, draw two parallel lines on the top left corner of the cheque and write “A/C Payee” between them. This makes the cheque non-transferable to anyone else.

What is a Post-Dated Cheque?

A post-dated cheque is issued with a future date written on it. The bank can only process or encash it on or after the specified date. It is commonly used for EMI payments or future-dated commitments.

What is MICR Code on Cheque?

MICR (Magnetic Ink Character Recognition) code is a 9-digit code printed at the bottom of cheques. It helps banks identify the branch and speed up cheque clearing. The MICR code is unique to each branch.

How to Fill a Cheque?

To fill a cheque, write the payee’s name, the amount in words and figures, the date, and sign in the bottom right corner. Avoid overwriting or leaving blank spaces. Always draw a line through any unused space.

How to Write a Cancelled Cheque?

Take a blank cheque, draw two parallel lines across it, and write “CANCELLED” in capital letters between the lines. Do not sign or write anything else. Ensure key details like account number and IFSC are visible.

What is a Cross Cheque & How to Cross It?

A cross cheque is marked with two parallel lines on the top left corner, which restricts its encashment over the counter. It can only be deposited into the payee's account. To cross it, simply draw two lines and optionally write “& Co.” or “A/C Payee.”

About the Author
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Rucha Khedkar

Content Writer - Insurance

Insurance doesn’t have to be a maze of fine print. I simplify policies, bring clarity to the details, and make financial decisions easier—one blog at a time. I enjoy turning numbers and insights into clear, actionable narratives that simplify personal finance. Read more

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