What are the three types of cheques mentioned?

The correct answer identifies the three types of cheques that are commonly recognized in financial transactions. A banker's draft is a cheque drawn by a bank on its own funds, offering a guarantee of payment, which makes it safer for transactions. A "cheque" is a general term that encompasses various types of cheques, providing a simple paper method for making a payment from one bank account to another. Lastly, a local bank cheque is typically issued by a local bank, which can be cashed or deposited within the same banking institution.

Understanding these types is integral to grasping the broader landscape of payment methods, as each has its unique features, uses, and levels of security. For example, while a banker's draft is often used for larger transactions due to its guaranteed nature, personal cheques may carry a higher risk of insufficient funds. The other options do not fully capture the essential categories or mix types inaccurately, which does not align with standard terminology in banking and payments.