Which statement describes a cashier's check?

Which statement describes a cashier's check?

• A. A check drawn on the bank's funds and issued by the bank, guaranteed by the bank.
• B. A check guaranteed by the payor's account.
• C. A personal check used for large payments.
• D. A check that can be cashed anywhere without verification.

Answer: (A)

A cashier’s check is a payment guaranteed by the bank, drawn on the bank’s own funds. When you obtain one, the bank takes your money to issue a check payable to the recipient, and the bank guarantees that payment. This gives the payee assurance similar to cash, because the funds come from the bank rather than from the payer’s personal account. In contrast, a personal check relies on the payer’s account having sufficient funds and, if not, can bounce. So the statement that describes a cashier’s check is that it is drawn on the bank’s funds and guaranteed by the bank.

A cashier’s check is a payment guaranteed by the bank, drawn on the bank’s own funds. When you obtain one, the bank takes your money to issue a check payable to the recipient, and the bank guarantees that payment. This gives the payee assurance similar to cash, because the funds come from the bank rather than from the payer’s personal account. In contrast, a personal check relies on the payer’s account having sufficient funds and, if not, can bounce. So the statement that describes a cashier’s check is that it is drawn on the bank’s funds and guaranteed by the bank.