Deposit Operations Flashcards
7 cards from real Banking practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Deposit Operations flashcards as text
Which federal agency directly supervises and insures deposits at state-chartered banks that are NOT members of the Federal Reserve System?
Answer: Federal Deposit Insurance Corporation (FDIC)
The FDIC is the primary federal supervisor for state-chartered non-member banks and also provides deposit insurance for all insured institutions.
A customer opens a revocable trust account naming four beneficiaries. What is the maximum FDIC coverage for this account?
Answer: $1,000,000
Revocable trust accounts are insured up to $250,000 per eligible beneficiary, so four beneficiaries = $1,000,000 total coverage.
What is the key difference between a demand deposit account and a time deposit account?
Answer: Demand deposits allow withdrawal at any time; time deposits have a fixed term
Demand deposits (checking accounts) allow immediate withdrawal on demand, while time deposits (CDs) lock funds for a specified term.
A customer asks why her available balance is lower than her account balance. The most likely reason is:
Answer: A recent deposit is under a hold per Regulation CC
Regulation CC allows banks to place holds on deposits, making the deposited amount unavailable until the hold expires.
Which type of check is drawn by a bank on its own funds and signed by a bank officer, making it the bank's direct obligation?
Answer: Cashier's check
A cashier's check is issued by and drawn on the bank's own funds, making the bank directly liable for payment.
A business customer deposits a check made payable to their business. Who must endorse it?
Answer: An authorized officer or agent of the business entity
Business checks must be endorsed by an authorized representative of the entity, as defined in the account's corporate resolution or authorization documents.
What is the primary risk of allowing a customer to withdraw funds from a deposited check before it has cleared?
Answer: The check may be returned unpaid, leaving the bank with a loss
If a check is returned after funds have been released, the bank absorbs the loss unless it can recover the funds from the customer.