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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.
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:
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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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.
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.