We may define a Sacrament as a visible sign instituted by Christ which effectively communicates the grace it signifies.

Each of the seven Sacraments is something visible or sensibly perceptible.  The water poured in Baptism, the oil used in Confirmation, the bread and wine for the Eucharist, along with the words pronounced and the ritual seen, are all perceptible to the senses.

The Sacraments are not only perceived by the senses they are also signs which signify.  They manifest something beyond the visible ritual performed.  Thus water signifies washing, oil signifies strengthening or healing, eating and drinking signify being nourished.  In each case the external sign signifies some internal change taking place in the human spirit.  And always this change is in the supernatural order, including some area or aspect of divine grace.

But the Sacraments are not merely signs that grace is received.  No, the heart of the Sacraments is they actually produce the grace which they signify.  They are like instruments in the hands of Christ who, through them, confers the graces proper to each sacrament.  

The Sacraments are a continuation of Christ's work of redemption.  They the link, as it were, between His passion on Calvary and our present needs on earth.  They are the channels by which His saving merits are now conveyed to a sinful world.  

The Sacraments provide a marvelous bond of visible unity among the members of the Christ's Church.  They distinguish the followers of Christ from all other, while those who belong to the Mystical Body are thus joined together by a sacred bond.

By means of the Sacraments we make public profession of our faith, and others witness to what we profess to believe.  In this way our faith is strengthened by its external profession and our charity is deepened by sharing with others, and they with us, the sacred mysteries of Christianity. 

[Pocket Catholic Catechism by Fr. John Hardon, SJ]