When you fill out an application related to insurance, a loan, or anything for which you need to provide your bank details, you will be asked to attach a cancelled cheque. You will ask the salesperson to show a cancelled cheque sample if it’s your first time. He will explain how to do it. But what if you’re applying online and want to know what a cancelled cheque leaf is? Let us explain it to you here.
So, what is a cancelled cheque leaf? A cheque leaf is crossed between two parallel lines, and the word “Cancelled” is written in between. Also, if you closely observe, nothing will be written on the important information on the cheque.
What is the important information that is needed on the cancelled cheque?
The cancelled cheque presents vital information about your bank account. It contains your account number, the IFSC code of the branch, your name, the type of the account, and a MICR number, among others. In the cancelled cheque sample, you will find the details mentioned earlier clearly.
If you want to transfer funds to anyone, ask them for a cancel cheque image or a bank passbook first page with all the required details.
Cancelled Cheque Image: What Does It Show?
The image of a cancelled cheque displays the word “cancelled” written across the cheque between parallel lines. The useful information can be retrieved from the cheque to retain for further use. Institutions such as insurance agencies, companies like Piramal Finance that provide loans, mutual fund management companies, etc. use the information shown on the cheque to transfer money to the concerned party at the time of payment. It is also useful to set up automatic deductions at regular intervals to avoid payment delays.
These financial institutions add the cancelled cheque as a required document for KYC (Know Your Customer). The cancelled cheque provides your bank’s details. And the bank has a record of your working mobile number, address, and email ID. Therefore, it becomes easy for any financial institution to keep track of the customer.
What Happens if I Give a Cancelled Cheque as a Sample?
You can give your cheque to anyone, but remember that you have to mark the purpose of the cheque. Did you issue the cheque for payment purposes or just for details? For payment purposes, make sure you cross the cheque at the top left corner to make it account payable. That means only the person whose name is on the cheque can get the money deposited into their bank account. This crossing of cheques is a secure way of making payments.
If you’re giving the cheque only for details, then do not give a blank cheque at any cost. Doing so will land you in trouble. Instead, draw two parallel lines diagonally across the cheque from the bottom left to the top right and write “cancelled” in between. This method ensures that the cheque is cancelled and can’t be used for any other purpose. Educate your friends and family by sharing this vital information and the picture of a cancelled cheque as a sample.
Do you have to inform your bank?
It is not necessary to inform your bank that you’ve cancelled a certain cheque number. But if you choose to report it, it will be a much more secure way to keep your money safe. If you notify the bank in writing, through a phone call, or sometimes using an internet banking facility that you’ve cancelled a cheque, they will mark it in their records. If, in the future, someone tries to withdraw money using the cheque you’ve cancelled, the bank will immediately inform you and stop the payment. The cheque number plays a crucial role in this. While informing the bank about which cheque is frozen or cancelled, quote the cheque number properly.
As mentioned above, you should look at the cancel cheque image to understand what a cancel cheque looks like. When you cancel the cheque, you must ensure the details are visible. The vital information should not be struck off or covered with pen ink, such as the bank account number, IFSC, bank branch, your name, the barcode-like number at the bottom, and the cheque number. Refer to the sample of a cancelled cheque to know more.
To find a cancelled cheque sample, a simple Google search with the phrase “cancelled cheque sample” is enough. Make sure to follow the detailed guidelines above to cancel the cheque without errors. Once the cheque is stricken cancelled, there is no way you can use it for payment purposes. Therefore, think carefully before cancelling a cheque for any purpose. The bank charges you a certain amount for the new chequebook. So choose wisely before taking any step. Just as a word uttered from your mouth cannot be taken back, a single line struck on the cheque cannot be cleared.
Save resources like a pro!
We Indians have a habit of using everything as little as possible. Wondering how this is connected to the cancelled cheque. If you made any mistake on a cheque, use it as a cancelled cheque by marking cancelled. We’ve seen above how to mark a cheque as cancelled. Also, instead of cancelling a cheque every time an application is filled, the photocopy of a single cancelled cheque as a sample can be attached to the list of documents.
This saves you money as well as paper. Thus moving a step ahead in being earth friendly. There are other alternatives to a cancelled cheque leaf, and those include:
- Bank passbook front page
- Account statement
- And as discussed above, a cancelled cheque photocopy
Having basic knowledge about banking and finance helps you be cautious. With many cyber crimes happening in the digital era, you should be very careful. Piramal Finance offers you accurate information on banking and financial services. Make sure your financial knowledge is up to date on essential services and products, such as personal loans and financial calculators, by reading the informative blogs on their website.