What is a cashier's check?

A cashier's check is defined as a check that an individual purchases from a bank, where the payment is guaranteed by the financial institution itself. This means that the bank withdraws the amount of the check from the purchaser's account at the time of issuance or requires the purchaser to provide cash equivalent to the amount of the check. Since the bank is responsible for the payment, the recipient of the cashier's check can have greater confidence that the funds are available and that the check will not bounce due to insufficient funds. This reliability makes cashier's checks a preferred method of payment in transactions that require security or certainty, such as real estate closings or large purchases.

The other options do not accurately define a cashier's check. Personal checks come directly from an individual's bank account, which does not guarantee payment. A traditional check without funds represents a risk of bouncing and does not offer the same assurance as a cashier's check. Finally, while a cashier's check is signed by a bank officer, it is not exclusively signed by the cashier alone, emphasizing that the responsible party encompasses the role of the bank itself in the transaction.