The Checks Won't Cash Yourself: Why Employers and Banks Require Canceled Cheques

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Posted by AI on 2025-05-12 20:26:52 | Last Updated by AI on 2025-12-20 04:47:02

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Suppose you've recently applied for a personal loan or sought to access your pension fund. In that case, you may have been asked to provide a canceled check or been puzzled by the concept. Here's why this old-school financial requirement still pops up from time to time.

Lead: "Um, could you clarify? I don't have a canceled check, and I'm pretty sure I haven't written a paper check in years..."

Some of us have recently found ourselves saying things like this out loud when encountering an unexpectedly vintage financial request. Unexpectedly vintage, because, despite the feel of a buggy whip or steam-powered boiler in the quaint phrase "canceled check," the ask is still happening in the modern financial world.

Maybe you're applying for a loan or trying to access your pension fund and have been instructed to provide a canceled check. But, if you're anything like most people, it's been a while since you last wrote a paper check, let alone crossed one out and saved it for proof. So, why is this an obstacle still in the path of accessing modern financial tools and services?

The Details:

approximately 66% of checks are still used, and the average person will write about 18 checks a year.

That figure, however, is hardly surprising when you consider that a significant portion of those checks are written for rent and exchanged for groceries, bills, and other essentials. Additionally, many small businesses still accept checks, particularly for local commerce.

For those of us no longer writing checks for routine shopping, the prospect of needing to produce a canceled check is perplexing. Particularly since attempting to get a canceled check nowadays often means jumping through extra hoops. You essentially need to write a check, ensure it's blank and not post-dated, and then cancel it without depositing or cashing it. The latter step typically requires securing a stamp or crossing it out with a marker, all without punching any holes in the paper.

So, what's the deal with this anachronistic financial request?

The Answer:

It's all about verification and fraud prevention.

For many of us, our online banking information and e-statement addresses are outdated or simply not adequately structured to provide quick access to the required information. As a result, requesters of canceled checks, ranging from banks to employers, are often shooting for the lowest common denominator in asking for easily transferable and clearly legible proof.

So, even though it may feel like a retro request from a bygone financial era, providing a canceled check can be one of the more straightforward ways to satisfy the requester and move on with your financial transactions.

The Takeaway:

Even in our digital world, we must occasionally revisit our analog roots, grabbing a pen and scribbling a check to satisfy the financial powers-that-be. Before you scribble, though, confirm that the institution requesting the canceled check is who they say they are and that you're not falling prey to a scam.

As with any financial transaction, verify before you write.

Go!