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In the great wide world of financial tools, there are a lot of items that today’s financial audience may not be as familiar with as previous generations.
This is largely due to the changing financial landscape and the fact that a wide variety of tools simply aren’t as popular as they once were.
Take for example, checks.
In the digital age where everything can be paid online, by card, or by phone, checks don’t hold the same appeal or usefulness that they did in the past.
However, that doesn’t mean that you won’t find yourself having to use them.
For example, someone may ask you to void a check when you land a new job and want to use direct deposit for your paycheck.
Or you might need to submit a voided check to an investment account so you can electronically transfer money.
But what is a voided check? How do you even void one?
What do you do when you encounter this type of demand?
Before you get too anxious, let’s take a closer look at what a voided check is.
Table of Contents
What Is A Voided Check?
The Anatomy Of A Voided Check
A voided check is a blank check that has been altered so as to prevent the check from being used for payment by the person receiving the check.
But wait, if the whole point of having paper checks is to make payments to others, why would you need to void them?
Unlike other tools you have in your checking account, checks are one of the few that contain bank account information that can be used to both send money to you and to send money from you.
With a voided check, the person or company on the receiving end of your check has all of your bank information, and you have the peace of mind knowing that your check can’t be forged to steal money from your account.
It might not seem like the most practical thing to modern consumers, but you’ll likely come across voided checks at some point in your lifetime, no matter where certain types of direct payments or recurring payments are involved.
Finally, you might wonder why you cannot simply offer a blank check to someone and instead of voiding it, put a stop payment on it.
The reason is money.
Most banks charge a fee to place a stop payment on a check. But there is no charge to simply void a check.
What Can Someone Do With A Voided Check?
So, now that you know what a voided check is, it’s time to understand exactly how you might use these in your daily life.
Voided checks are such a valuable and useful tool because they contain all of your necessary banking details for another party to use to make payments to you or accept payments from you.
Not only is your personal information on the check, but so is your bank account number and the bank routing number.
What can someone do with a voided check?
Here are some of the common uses.
#1. Set Up Direct Deposit
If you work a regular 9-to-5 job, many employers encourage you to sign up for direct deposit of your paycheck.
This is because direct deposit saves them time and money from issuing you a physical paycheck.
Plus is it easier for you as the money is electronically transferred to your bank account.
And as an added bonus, many employers allow you to split your direct deposit between your checking account and your savings account.
That being said, your employer may want physical proof of the checking account they’re sending the money to.
This helps them to make sure they don’t make any mistakes when they set up direct deposit to your account.
#2. Set Up Direct Payments
Do you run your own business?
Do you have a few clients or vendors that prefer to be paid electronically on a regular schedule?
If so, you might want to set up direct payments using voided checks so that they’re getting the cash they need to continue conducting business with you.
Otherwise they would have to regularly chase down invoices and wait for the cash to come into their accounts.
When it comes to business, you want everything to run as smoothly as possible.
#3. Make Regular Electronic Payments
Whether you’re paying your car loan or your rent, setting up recurring direct deposit to your landlord or lender is much simpler than having to remember each month to make the payment.
Using a voided check for this purpose decreases the risk that you might forget to pay and makes for a more seamless payment experience for the other party.
#4. Set Up Electronic Transfers
If you have investment accounts or checking or savings accounts at other financial institutions, it is much faster, easier, and safer to transfer money electronically.
To set this up, you usually have to supply the financial institution a voided check for accurate account information and proof you are the account holder.
#5. When You Make A Mistake
In addition to these situations, one might make a mistake when they’re writing a paper check.
When this happens, being able to void the check makes it so that no one can find it later and try to cash it for themselves.
#6. When You Close An Account
Maybe you decided to switch from your credit union to online banking.
What do you do with the unused checks you have?
Ideally, you simply shred them.
But if you don’t have access to a shredder, you need to practice check voiding.
If you throw checks in the trash without voiding them, there is a risk someone takes them and uses them to commit fraud.
You might think that since there is no money in the old bank account, there is nothing to worry about.
But your personal information is on the check as well as banking information.
This is enough to commit fraud and the authorities will come to you first, since the paper checks have your name on them.
This will create a lot of headaches and stress that you can easily avoid by voiding checks.
Put simply, voiding a check comes in handy whether you’re looking to set up payments using your bank information or you need to cancel and make a check unusable if a mistake is made.
It also protects you from fraud if you have blank checks sitting around that you may not plan on using anymore.
Even if you don’t use checks all that often, knowing how to void them is an essential skill.
How Do I Void A Check?
So, now that you know everything you need to know about voiding checks and where you might use these tools, how exactly does one void a check?
While it sounds like a complex thing to do, it’s not.
First, get yourself a blue or black pen.
The reason you want to write with a black or blue pen is because it is harder to erase the ink.
Ideally you get the Uni-Ball Signo Gel Pen.
This is because it is highly recommended as the best pen for check writing.
The #1 pen for safe and secure check writing. You'll love this pen so much, it will probably become your every day pen!
Once you have this, write the word VOID in large letters across the face of the check.
Many people make the mistake and only write VOID in smaller letters on the payee line.
This isn’t solid advice.
This is because skilled fraudsters can easily remove this and have a perfectly usable blank check they can cash at the bank and withdraw money from your account.
Therefore, make sure it is written out in big letters so it covers the entire check.
Next, while many suggest that this is all you need to do if you want to void a check, if you want to play it safe, others say that you should also write VOID in each section of the check as well.
This includes on the payee line, signature line, amount line, and date line.
By doing this, you prevent anyone from trying to write the amount they want in any of these sections and trying to get it cashed.
With that said, don’t write on the check so that the bank routing number, your account number, or your personal information is unreadable, especially if you are presenting the voided checks to your employer for direct deposit.
The idea in this situation is to provide proof of account ownership, not stop a questionable person from cashing in the check.
Finally, when you do void a check, make sure you record it in your check register.
Include the check number, the date it was voided and who it was given to.
This when you when notice a check missing on your statement, you know why it doesn’t show up.
Now you know what is a voided check.
While most of us do not issue written checks out frequently these days, it is still important to know how to provide a voided check.
Doing so is a fast and easy way to set up electronic transfers and automatic payments.
- Read now: Find out how to write a check to yourself
- Read now: Here are the best places to cash a check
- Read now: Learn what happens if you bounce a check
I have over 15 years experience in the financial services industry and 20 years investing in the stock market. I have both my undergrad and graduate degrees in Finance, and am FINRA Series 65 licensed and have a Certificate in Financial Planning.
Visit my About Me page to learn more about me and why I am your trusted personal finance expert.