What is a Cancelled Cheque?
A terminated cheque in India just describes any type of cheque that has strike marks on it with words ‘terminated’ composed throughout. A cancelled cheque is thought about to be evidence that you really hold an account with the bank. From withdrawal of EPF funds to establishing a Digital Clearance Service from the account, a cancelled cheque is required oftentimes.
However before we discuss using terminated cheques, allow us tell you exactly how to issue a terminated cheque.
Use of Cancelled Cheques
- A lot of financial investment organisations provide utmost importance to Know Your Customer (KYC) guidelines. So if you are buying Shared Funds or the stock market, the company will request for a terminated cheque to confirm if the account related to the financial investment in fact belongs to you.
- From getting of accessories like a cellphone, TELEVISION or refrigerator to making an application for an Auto loan, Mortgage, Education and learning Lending, and so on, EMIs have become the preferred mode of settlement. As well as to set the procedure of EMIs rolling, a cancelled cheque is needed as proof that you hold a checking account.
- A terminated cheque is required to set up the Electronic Clearance Solution, which automatically deducts loan from your account on a monthly basis.
- To withdraw your provident fund amount, firms normally request for a cancelled cheque with your name on it to validate your account details.
- Also while buying an insurance policy, a cancelled cheque is called for.
Issuing a Cancelled Cheque
To terminate a cheque leaf, all you require to do is draw two parallel lines across the cheque and also compose ‘Cancelled’ in between both lines. A cancelled cheque does not require your trademark. It gives details such as account number, account owner’s name, MICR code, name and branch address of the financial institution.
Though no one can take out cash from your account using a terminated cheque, illegal tasks making use of a cancelled cheque have actually taken place in the past. So be very cautious when you release a terminated cheque as well as make sure that the person you are handing it over to is exceptionally reliable. Obtained it?
Well, we wish that we have responded to all your uncertainties about a terminated cheque. If you are looking for some investment alternatives, go ahead and check out!