Which monetary instrument is purchased at financial institutions?

• A. Money Order
• B. Cashier's Check
• C. Traveler's Check
• D. Personal Check

Answer: (B)

Cashier's checks are bank-issued and guaranteed by the bank, and you obtain them directly from a financial institution. When you purchase one, you give the bank the funds for the amount and the bank, in turn, issues a check drawn on its own funds payable to the recipient. That bank guarantee is what makes this instrument specifically tied to and purchased at banks. Money orders can be bought at a variety of places, including post offices and grocery stores, and are prepaid but not guaranteed by the issuing bank in the same way. Traveler's checks are sold to travelers and can be purchased from banks or other issuers, but the defining feature here is the bank-guaranteed cashier’s check. Personal checks are drawn against your own account, not bought from the bank in the same transaction.