A written order telling a bank to withdraw a sum of money from your account to pay another person or business is what financial instrument?

• A. Check
• B. Credit card
• C. Debit card
• D. Wire transfer

Answer: (A)

A written instruction to a bank to withdraw a specific amount from your account and pay it to another person or business is a check. It functions as a negotiable instrument because you are directing the bank to transfer funds from your checking account to the named payee, typically by signing the document and providing the date and amount. When the check is presented and processed, the bank debits your account and credits the payee’s account. This differs from a debit card, which withdraws funds electronically at the time of a purchase; a credit card, which borrows money to be paid back later; and a wire transfer, which is an electronic transfer of funds between banks initiated digitally rather than via a paper instrument.