What type of check is drawn on a bank's own funds and can be used by anyone to pay a debt?

A cashier's check is indeed drawn on a bank's own funds, which makes it a secure form of payment. When a bank issues a cashier's check, it guarantees the payment, drawing directly from its own funds rather than an individual's account balance. This characteristic instills a high level of confidence in the transaction, as the bank has already verified the funds are available and has assumed responsibility for the amount stated on the check.

Cashier's checks can be used by anyone to pay a debt, as they are often used in transactions where large sums of money are exchanged, such as real estate purchases, because of their reliability and the assurance of funds. This makes them a preferred method for buyers and sellers to ensure that payment is received without the risk of a bounced check that can occur with personal checks.

In comparison, personal checks reflect the payer's account and are subject to availability of funds. Certified checks are also guaranteed by the bank but are tied to an individual's account and require previous validation of funds. Money orders, while secure, are an alternative payment method that is different from checks and typically involve smaller amounts. Each of these alternatives has specific applications, making the cashier's check particularly useful for larger or more formal transactions.