Baptism (Matthew 28:19) and The Lord’s Supper (Communion) (Luke 22:19) are the two sacraments of the Church. They contain three (3) distinguishing marks: they were instituted by Christ, Christ commanded his followers to observe them, and they are visible symbols of divine acts. Whereas Protestant Churches only have two sacraments, The Catholic Church adds the following sacraments: Confirmation, Penance, Reconciliation, Anointing the Sick, Holy Orders, and Matrimony.
A sacrament is a visible sign of an invisible spiritual reality. Put another way, a sacrament is a visible sign of an invisible grace. This grace is a gift given to undeserving people and received by faith [alone] (Romans 3:23-25). Baptism and Communion are practices that depict an invisible spiritual reality. The practices in and of themselves have no inherent effect on the life of the believer.
However, since some denominations (e.g., Catholics) identify a sacrament as a means of grace, some churches prefer to use the word ordinance, which denotes a practice demonstrating a person’s faith. Since Protestants tend to explain what they mean when they use the word sacrament or ordinance, it doesn’t matter which a church uses. In my essays, I’ll use them interchangeably.
Any definition or discussion of a sacrament must remain coherent with a gospel received through grace by faith alone (Ephesians 2:8-9).