What is a cashier's check?

What is a cashier's check?

• A. A check issued by a business for services
• B. A personal check with guaranteed funds
• C. A check guaranteed by a bank, drawn on its own funds
• D. A standard check that can bounce

Answer: (C)

A cashier's check is a financial instrument that is guaranteed by a bank and drawn on the bank's own funds. This means that when a customer requests a cashier's check, the bank verifies that the customer has the necessary funds and then withdraws that amount from the customer's account. The bank then issues the check, assuring the recipient that the check will be paid, as the funds have already been earmarked by the bank. The guaranteed nature of a cashier's check makes it a secure payment method, as there is a lesser risk of the check bouncing compared to personal checks, which can be affected by insufficient funds in the issuer's account. Other payment methods, like personal checks or checks issued by businesses for services, do not provide the same level of security or assurance that funds are guaranteed by a banking institution. This reliability makes cashier's checks a preferred choice for large transactions, such as real estate purchases or other significant monetary exchanges.

A cashier's check is a financial instrument that is guaranteed by a bank and drawn on the bank's own funds. This means that when a customer requests a cashier's check, the bank verifies that the customer has the necessary funds and then withdraws that amount from the customer's account. The bank then issues the check, assuring the recipient that the check will be paid, as the funds have already been earmarked by the bank.

The guaranteed nature of a cashier's check makes it a secure payment method, as there is a lesser risk of the check bouncing compared to personal checks, which can be affected by insufficient funds in the issuer's account. Other payment methods, like personal checks or checks issued by businesses for services, do not provide the same level of security or assurance that funds are guaranteed by a banking institution. This reliability makes cashier's checks a preferred choice for large transactions, such as real estate purchases or other significant monetary exchanges.