How to Make a Cancelled Cheque: All You Need to Know?

Lucky Singh, a 28-year-old farmer from Pratapgarh, Uttar Pradesh, wanted to invest ₹1,500 per month in a mutual fund company's SIP (Systematic Investment Plan). However, the person in charge informed him during registration that:

“Sir, we need a cancelled cheque from your bank account to verify the details.”

Lucky had no idea what that meant, so he visited his bank, Bank of Baroda, Pratapgarh Branch, and got help.

Here's what Lucky did:

• Took a blank cheque from his chequebook.
• Drew two parallel lines diagonally from corner to corner.
• In between the lines, he wrote “CANCELLED” in capital letters.
• He did NOT sign the cheque.
• His cheque showed:
  • Name: Lucky Singh
  • Account Number: 105320005678
  • IFSC Code: BARB0PRATAP
  • MICR Code: 211012005

He submitted the cheque along with the investment form. A week later, Lucky received a confirmation SMS:

“Your SIP of ₹1,500/month has been activated successfully.”

And just like that, Lucky’s journey into investing began with one simple cancelled cheque.

What Is a Cancelled Cheque?

A cheque with the word "CANCELLED" printed on it is considered a cancelled cheque and is not valid for any transactions. It acts as documentation of your name, account number, IFSC code, MICR code, and other bank account information. This document is frequently used in a variety of financial transactions for verification purposes.

This cheque is often used for non-transactional verification such as setting up ECS mandates, KYC processes, and salary accounts.

How to Write a Cancelled Cheque?

Here is the guide to writing a cancelled cheque:

• Take an unused cheque leaf.
• Draw two parallel diagonal lines across the cheque.
• In between these lines, write “CANCELLED” in uppercase.
• Do not sign the cheque.
• Ensure all printed details (account number, name, IFSC, MICR) are clearly visible.
  
  

Common Uses of a Cancelled Cheque

Read More – How to Fill Out a Deposit Slip
 

A cancelled cheque is typically required to validate bank details in many processes, including:

• Opening a Demat Account
• Applying for loans or credit cards.
• Setting up ECS (Electronic Clearing Service) mandates.
• Employee Provident Fund (EPF) withdrawals.
• Registering for auto-debit mandates (insurance, SIPs, etc.).
  
  

Risks and Precautions

Even though a cancelled cheque cannot be used for transactions, it contains sensitive data. Hence:

• Never sign a cancelled cheque.
• Do not share it casually or online.
• If lost, report immediately to your bank.
• Prefer handing it over in person or via secure company channels.
  
  

Digital Alternatives to a Cancelled Cheque

Also Read - How to Apply for Cheque Book in SBI
 

Government and private institutions now accept digital documents as alternatives:

These are usually accepted with an official bank stamp or signature.

Conclusion

Though cancelled checks seem to be simple, they are essential for processes like loans, ECS, and investments. Simply write a blank cheque as "CANCELLED" without signing it. It safely shares your bank details—no money is transferred. Even with technology, it's still reliable in India.

Faqs

1. What is a cancelled cheque?

A cancelled cheque has “CANCELLED” written across it. It cannot be used for payment but confirms bank details like account number and IFSC.

2. Why is a cancelled cheque needed?

It’s used to verify your bank account when setting up services like loans, SIPs, salary credit, or KYC.

3. How do I cancel a cheque correctly?

Take a blank cheque, draw two parallel lines, and write “CANCELLED” between them. Do not sign the cheque.

4. Can I reuse a cancelled cheque?

Yes, if the cheque is still valid and accepted by the organisation. There’s no harm in reusing it.

5. Is it safe to give a cancelled cheque?

Yes, if you don’t sign it and give it only to trusted parties. It only contains bank details.

6. Does a cancelled cheque have an expiry date?

There’s no official expiry, but some companies may ask for one issued within the last 3 months.

7. Can I submit a scanned or photocopy of a cancelled cheque?

Some institutions accept scanned or self-attested copies, but many require the original for verification.

8. Should I sign a cancelled cheque?

No, never sign it. A signature isn’t required and could make the cheque vulnerable to misuse.

9. What must be visible on a cancelled cheque?

Your name, account number, bank name, IFSC, and MICR code should all be clear and readable.

10. What if I don’t have a chequebook?

You can request a bank account verification letter or submit a passbook copy as an alternative.

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LoansJagat Team

We are a team of writers, editors, and proofreaders with 15+ years of experience in the finance field. We are your personal finance gurus! But, we will explain everything in simplified language. Our aim is to make personal and business finance easier for you. While we help you upgrade your financial knowledge, why don't you read some of our blogs?