How can you mark your cheque as cancelled by using cancelled cheque leaf sign while issuing to anyone for banking, government or financial purpose?
How to mark a cancelled cheque?
With the boom of internet and online marketing, anything and everything under the sun is just a few clicks away. Like every other business sector, even banking has gone out of providing various services online, making life easier for millions of customers. This includes fixed deposits, savings accounts and loans. But as online banking is growing rapidly, there are some aspects of banking that need to be taken care of in the traditional way.
Issuing canceled checks is a process that needs to be done manually. While everyone is aware of the payment through check, young online banking customers are skeptical about the canceled check. So, let’s go ahead and clear our doubts!
What is a canceled check?
A canceled check in India refers only to any check that has a mark inscribed on it, with the word ‘canceled’ written on it. A canceled check is considered proof that you actually have an account with the bank. Cancellation checks are necessary in many cases, from withdrawal of EPF amount to setting up of electronic withdrawal service from the account.
But before we talk about the use of canceled checks, let us tell you how to issue a canceled check.
Best way and preconceptions while issuing the cancelled cheque
To cancel a check leaf, all you have to do is draw two parallel lines between the two checks and write ‘cancel’ between the two lines. A canceled check does not require your signature. It gives details like account number, account holder name, MICR code, bank name and branch address.
Although no one can withdraw money from your account using a canceled check, fraudulent activities using a canceled check have occurred in the past. So be very careful when you issue a canceled check and make sure that the person to whom you are handing it is extremely reliable. Understood?
What is the best use of a canceled check?
Most investment organizations are of utmost importance to know your customer (KYC) guidelines. So if you are investing in a mutual fund or the stock market, the company will ask for a canceled check to verify whether the account actually associated with the investment belongs to you.
From purchasing goods like mobile phones, TVs or fridges to applying for car loans, home loans, education loans etc.,
EMI has become the preferred method of payment. And to determine the EMI rolling process, a canceled check is required as proof that you have a bank account.
Setting up an electronic clearance service requires a canceled check, which automatically deducts money from your account every month.
To withdraw your provident fund amount, companies usually ask for a canceled check with your name on it to validate your account details.
Even when purchasing an insurance policy, a canceled check is required.