A voided cheque is a useful banking feature that is not used as frequently as it once was, despite the fact that using them to facilitate automatic payments and direct deposits is a simple and cost-effective method.
In this article, we'll go over when and why you might need to use a void cheque, as well as some pointers on how to properly fill one out.
What Is a Void Cheque Used For?
A voided cheque is a cheque that has been cancelled so that it cannot be cashed in. It is typically used to help set up direct deposits or automatic bill payments, as your name, address, and bank information can be found on a voided cheque.
When you provide a cheque to your employer or a company that you do business with, they can also use the information on the void cheque for a direct deposit or automatic payment. The funds are then transferred directly from your bank account to the recipient on the date specified in the direct deposit or automatic payment agreement.
Additionally, a voided cheque can be used to set up new accounts at your financial institution. When you open a new account, you may be asked to provide a voided cheque so that the financial institution can set up the account and arrange for any payments to be made from your account.
There are a few other reasons you might need to void a cheque, such as insurance, rent, or mortgage payments, if you need to cancel a payment, or if the cheque contained an error.
How To Void a Cheque?
You've probably already written standard cheques and know it's a simple process - the same is true here. Simply write the word "void" across the front of a cheque to void it; this prevents anyone from cashing or depositing it. Voided cheques should be marked with a thick black marker, not a pencil, as the writing could otherwise be erased.
Do not cover up the banking information at the bottom of the cheque because it is necessary for the recipient to know those numbers. Voiding a cheque is a simple process, but it still requires a bit of care so as to avoid any potential problems further down the line.
Understanding the Cheque’s Components
A cheque is a document that instructs a bank to transfer funds from a person's account to the person to whose name the cheque is issued. Before writing a void cheque, you’ll want to understand the information on the cheque itself.
Each bank's cheque is slightly different, but they all share some characteristics. Most cheques contain the following information: your account number, your address, your bank's address, the transit number, and the institution number, which we'll go over now.
Your address: One of the reasons it's essential that you keep your bank account information up to date is because the cheque includes your full legal address.
Your bank’s address: In the event that you or anyone handling the cheque needs to send correspondence, this provides the bank's physical location. Even if you relocate to a new city or province, this originating branch remains the same.
The transit number: The transit number on the void cheque lets you locate the original bank location where you opened your account. A paper cheque has three letters in the bottom left that are followed by the transit number, which is comprised of five digits. It’s worth noting that even if you do all of your work online, your account is still linked to a physical bank location.
The institution number: The three digits following the transit number represent the institution's unique identification number. The transit and institution numbers provide digital directions to your bank account's virtual location.
Your account number: Your account number is the final piece of void cheque information. It follows the institution number and is either seven or twelve digits long, depending on the bank.
How To Get a Void Cheque
It is actually quite easy to get a voided cheque. If you have a physical cheque book, simply write "void" across the front of any blank cheque.
If you don't have a physical cheque book, you can usually request a sample void cheque from your bank, print one from your online banking portal, or use cheque printing services such as those provided by Cheques Plus.
Once you have a voided cheque, simply fill out any required information and give it to the appropriate person, and they will handle the rest.
Bottom Line
And there you have it - the answer as to what a void cheque is, what it’s used for, and how to properly void a cheque if you need one for any reason.
All in all, though void cheques aren’t as common a sight as they used to be due to the rising popularity of online banking, especially since the outbreak of the pandemic, they still have an important place in the world of finance.
