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Cancelled Check

Updated on April 16, 2024 , 10763 views

Understanding Cancelled Checks

A cancelled check is declared paid once the same has been through the check clearing process. The check gets cancelled once the given amount has been drawn from the particular Bank for which the check was written on. When you wish to understand what cancelled check means, it is important to understand the different roles in the given process.

Cancelled Check

The payee is referred to as the individual to whom the check has been written. The bank of the payee is known to receive the deposit.

When you undertake the process of cancelled checks, it is known to involve the following:

  • The payee (to whom the check has been written) signs the check’s back
  • The check is then deposited into the bank account of the payee
  • The bank of the payee notifies the bank of the drawee
  • The bank of the drawee (the bank from which the check was written) pays the given amount to the bank of the payee
  • The bank of the payee deposits the cash and ensures the funds in the “available” deposit section for withdrawal

In the current era, almost all checks get cleared through the electronic mode even when the deposit happens to be a paper check.

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How Customer Access in Case of Cancelled Check Works?

Conventionally, cancelled checks were sent back to the respective account holders with the respective monthly statements. However, this incident has become quite rate. Most of the check writers tend to receive scanned copies of the given cancelled checks. At the same time, banks are known to create digital copies for the overall safekeeping.

As per the law, financial institutions are required to keep cancelled checks for making copies of the same for 7 years. Mostly, customers who tend to utilize the feature of online banking can access the respective copies of the cancelled checks with the online medium. While most of the banks are known to charge for paper-based copies of the respective cancelled checks, the customers can now print copies from the official website of the bank for free of cost.

Cancelled Checks Versus Returned Checks

The cancelled check gets honoured by the bank. On the other hand, a returned check can be defined as the check that was not cleared at the bank of the buyer. As a result of this, the funds are not made available to the depositor of the payee. There are some reasons why the given check can be regarded as returned. One of the most common reasons for the same is the lack of proper funds in the account of the payor.

Disclaimer:
All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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