Question

What is a check purchased in a bank and signed by a bank representative, usually purchased for a large purchases requiring guaranteed payment or by those without personal checking accounts?

Answer 1

A certified check is a check purchased in a bank and signed by a bank representative. It is used for large purchases requiring guaranteed payment or by those without personal checking accounts.

Step-by-step explanation:

A check purchased in a bank and signed by a bank representative is called a certified check. Certified checks are usually purchased for large purchases requiring guaranteed payment or by those without personal checking accounts.

Certainly, a certified check is a form of payment issued by a bank after ensuring that sufficient funds are available in the payer's account. It bears the bank's guarantee of payment, as it's drawn directly from the bank's funds and signed by a bank representative. Often utilized for significant transactions or by individuals without personal checking accounts, it assures the recipient of guaranteed payment, making it a preferred method for secure and reliable transactions.

Answer 2

A cashier's check is a financial instrument purchased at a bank and signed by a bank representative, often used for large purchases or by individuals without personal checking accounts. Banks play a key role in facilitating transactions and managing financial risks in the economy by offering various banking services and securing loans with credit checks, cosigners, or collateral.

Step-by-step explanation:

The financial instrument you are referring to is called a cashier's check or a bank check. This is a check purchased at a bank and signed by a bank representative, ensuring that the funds are available and guaranteeing payment. These checks are commonly used for large purchases or by individuals who don't have personal checking accounts. In the context of a complex economy, banks serve the critical function of facilitating transactions. They enable both personal and business banking customers to avoid the inconveniences of carrying large sums of cash, offering alternatives such as checking accounts, savings accounts, direct withdrawals, and the use of debit cards for a secure and convenient flow of financial capital in the market.

Banks also play a role in the financial capital market by making loans and requiring borrowers to provide information on income sources, undergo credit checks, and sometimes provide cosigners or collateral to secure the loan. This systematic approach to lending helps ensure that the banks can recover their funds in the event of default, thereby stabilizing the financial system.