What is a Canceled Check? Today we are going to be talking about a canceled check, which is one of the most important things in banking and finance. If you have heard of the term “canceled check” and you do not know what it means, in this article, I am going to tell you everything about it. We are going to look at what a canceled check is today and why you need a copy of a canceled check.
What is a Canceled Check?
The easiest and simplest definition of a canceled check is a check that has already been cashed out or paid out by the bank. This means that a check is said to be a cashed check when it has been cashed out or the money in it has been paid out. Once a check has been canceled, which means that it has been used, it can no longer be used again.
When you issue a check, there are several methods that the bank can use to move the money in the check from your account to the person you issued the check to. Once the check has been cashed out and canceled, it now serves as a receipt. In the past, banks normally gave back canceled checks, but today banks are no longer obligated to do that.
How Does Customer access to a Canceled Check Work?
In the past, just as I mentioned above, when a check has been canceled, it has been sent back to the account holder to keep. However, this is no longer the case. What banks do these days simply send the person a scanned copy of the canceled check? When the person has been sent a scanned copy of the canceled CHK, the bank also creates a digital copy for safekeeping.
It is mandated by law that a canceled CHK must be kept for 7 years. So the bank must either keep a copy of the check or have the capacity to create copies so that it can be kept for 7 years. If you make use of online banking, you can simply log into your banking website or app and access your copies of checks online. From there, you can decide to print or save a copy for yourself.
Why would I need a copy of a Canceled Check?
It is very important to keep a copy of a canceled CHK. This is because a situation might pop up where you might need to present it. So you always need to have a canceled CHK copy even after it has been paid out to the person you should be paying. That being said, below are some of the reasons why you need to keep a copy of a canceled check:
- You need a canceled CHK to dispute an error with your bank, in case there is one.
- It can be used as proof of receipt of a donation to a charitable organization.
- Your canceled check can also be used as proof that you have made your tax payment.
- When it is presented, it can resolve issues between companies or banks.
What is the Difference Between a Canceled Check and a Returned Check?
A canceled check is a check that has been paid out to the person it was issued. A canceled check is typically a check that has already been cleared and the money cashed out. That being said, a returned check is a check that was rejected by the bank, which means it has not been processed nor has the money been cashed out.
A returned check might be returned for a wide variety of reasons. One of the most common ones is a missing signature or insufficient funds in the account. Note that when a check gets returned, you are definitely going to pay a fee.
Canceled Check vs. Stop Payment Order
A canceled cheque and a stop payment order are not the same things, but they are in the same place. What I mean by they are in the same place is the fact that when you put a stop payment order in a check, it will not be cashed. When the banks have a stop payment order notice on a check, they will not honor it. This is because you did not want anybody to cash the check.
A typical example is when a check gets lost, you can request a stop payment order from your bank on that check so that it is not paid out even if another person finds it.
How to search for a Canceled Check
As I have mentioned several times in this article these days, banks no longer return canceled CHKs to the owner or the issuer. But they instead send them digital copies of the check in their bank statement so as to have a copy. So, if you want to obtain a copy of a canceled check, you should consider the following options:
- Look for a banking online platform and download a copy of it from the application or website.
- Simply request a copy at your bank branch over the phone.
These are the two best ways you can make use of to get a copy of a canceled CHK if you need to.
Frequently Asked Questions
How do you get a canceled CHK?
To get one, as I have mentioned above, you need to request a copy from your bank by contacting them using your phone. You can also decide to make use of your online banking application or website to download a digital copy from there. Banks and credit unions are required to keep copies of them for up to seven years in case the need arises for them.
What is proof of a canceled CHK?
When a check has been cleared, which means it has been canceled, it contains a stamp on it by the bank that it has been paid to the person it was issued. It is important to note that it cannot be used again but only as a receipt. However, a canceled CHK on its own can be used as proof of payment for whatever it was meant to be.