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Cancelled Cheque – What is a Cancelled Cheque and When it is Used?


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A cheque is an instrument used to make payments and it is used by many businessmen and companies. You will just have to write the payee’s name, the amount in words, the amount in numbers, and provide a valid signature on the cheque to make the payment. But sometimes, you need to cancel a cheque and it can be due to any reason. Therefore, you must go through the meaning of a cancelled cheque in this blog. So, a cancelled cheque contains two parallel lines and it is drawn across the layout of the cheque. It is also necessary to write the word “CANCELLED” between those two parallel lines to cancel the cheque. There is no need for any signature to cancel a cheque.

Purpose for a Cancelled Cheque

A cancelled cheque is asked by many institutions to verify your bank account details. If you provide each and every detail of your bank account to the institutions then it is tiring and time-consuming whereas a cancelled cheque can do the job much faster.

A cheque cancelled by the account holder usually contains the following details that you will not have to provide to the institution. All the necessary details are present on a cheque like:-

  • Name of the Account Holder
  • Account Number of the Account Holder
  • Name of the Bank
  • Address of the Bank or the Branch’s Name
  • MICR Code
  • IFS Code

So, the purpose for cancelling a cheque and giving it to any institution is just to provide your banking details to that institution.

Need For the Cancelled Cheque

There are some cases when you need to submit a cancelled cheque to the respective institution and you can go through all of them below:-

Opening a Demat Account

Whenever you open a Demat account to trade into the market, you need a cancelled cheque. The broking institutions just ask for the cancelled cheque to verify your account details so that you can trade easily and transfer money from that account.

Paying EMIs

If you are applying for any loan then the bank can ask for a cheque cancelled by you so that it can use the account details to deduct the EMIs. Once the bank has your account details and your approval then it will automatically deduct the EMI on the due date.

Withdrawing Provident Fund

When you are withdrawing the provident funds, then the organization might ask for the cancelled cheque so that it can have all the details related to your account and easily transfer the funds to it.

Buying Insurance Plans

There are many insurance companies who ask for a cancelled cheque at the time of issuing the policy so that they can have the account details in their records. Then in the future, if you make any claim, the company will directly transfer the compensation amount into your account.


Now you know the importance of a cancelled cheque and the cases when it is required. The process of cancelling a cheque is easy and you will just have to draw two parallel lines across the layout of the cheque and write CANCELLED between those two parallel lines. Your cheque will be cancelled and it can’t be encashed by anyone.


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