Which statement about certified checks is true?

• A. The funds are always drawn from the payor's own funds.
• B. The check is guaranteed by the payer's bank funds.
• C. The check can be disputed easily.
• D. It is guaranteed by the bank using the bank’s own funds.

Answer: (D)

Certified checks are payment guarantees backed by funds that are set aside from the check writer’s own account. The bank verifies that the drawer has enough money and then earmarks those funds so the check will clear when presented. The promise to pay comes from the bank’s certification, but the actual funds come from the drawer’s account, not the bank’s own money. So the true statement is that the funds are drawn from the payor’s own funds, and the bank simply guarantees payment by certifying and securing those funds. The idea that the bank uses its own funds to guarantee is not accurate, and the notion that certified checks can be easily disputed isn’t correct because the funds have already been set aside.