What type of check guarantees that funds are available?

What type of check guarantees that funds are available?

• A. Personal check
• B. Bank check
• C. Cashier's check
• D. Traveler's check

Answer: (C)

A cashier's check is a type of check that is guaranteed by the issuing bank, meaning that the bank verifies that the funds are available before issuing the check. When a customer purchases a cashier's check, the bank takes the amount of the check out of the customer's account and then writes a check from its own funds. This process provides assurance to the payee that the funds are secure and will be honored when presented for payment. In contrast, personal checks depend on the availability of funds in the issuer's account and can potentially bounce if insufficient funds are present. A bank check, which is often similar to a cashier's check but may have different terms depending on the issuing bank, may not offer the same level of guarantee as a cashier's check. Traveler's checks are prepaid and can serve as a secure payment method while traveling, but they are not typically used in the same manner as a cashier's check. Therefore, the cashier's check stands out as the clear option that guarantees the availability of funds.

A cashier's check is a type of check that is guaranteed by the issuing bank, meaning that the bank verifies that the funds are available before issuing the check. When a customer purchases a cashier's check, the bank takes the amount of the check out of the customer's account and then writes a check from its own funds. This process provides assurance to the payee that the funds are secure and will be honored when presented for payment.

In contrast, personal checks depend on the availability of funds in the issuer's account and can potentially bounce if insufficient funds are present. A bank check, which is often similar to a cashier's check but may have different terms depending on the issuing bank, may not offer the same level of guarantee as a cashier's check. Traveler's checks are prepaid and can serve as a secure payment method while traveling, but they are not typically used in the same manner as a cashier's check. Therefore, the cashier's check stands out as the clear option that guarantees the availability of funds.