Banking Deposit Operations 2 — Questions and Answers
Question 1: A customer wants to add a joint owner to an existing savings account. What documentation is typically required from the new joint owner?
- Only a signature card
- Government-issued ID and a completed signature card (Correct answer)
- A notarized letter from the original account holder
- Proof of relationship to the original owner
Correct answer: Government-issued ID and a completed signature card
Adding a joint owner requires the new party to provide government-issued ID for CIP compliance and sign a new signature card.
Question 2: Which type of endorsement restricts a check to deposit only into a specific account?
- Blank endorsement
- Special endorsement
- Restrictive endorsement (Correct answer)
- Qualified endorsement
Correct answer: Restrictive endorsement
A restrictive endorsement (e.g., 'For deposit only to account #12345') limits how the check can be processed.
Question 3: Under Regulation CC, what is the maximum hold period a bank can place on a local check deposited by a new account customer?
- 1 business day
- 2 business days
- 5 business days (Correct answer)
- 9 business days
Correct answer: 5 business days
For new accounts (open less than 30 days), Regulation CC allows up to a 5-business-day hold on local checks.
Question 4: A customer deposits $12,000 in cash in one transaction. What must the teller do?
- File a Suspicious Activity Report (SAR)
- File a Currency Transaction Report (CTR) (Correct answer)
- Refuse the transaction
- Split the transaction into smaller amounts
Correct answer: File a Currency Transaction Report (CTR)
Cash transactions over $10,000 require the bank to file a Currency Transaction Report (CTR) with FinCEN.
Question 5: What happens to the interest accrued on a CD if a customer withdraws funds before the maturity date?
- The bank keeps all accrued interest
- An early withdrawal penalty is charged, which may forfeit some interest (Correct answer)
- The customer receives all accrued interest with no penalty
- The CD automatically renews at a lower rate
Correct answer: An early withdrawal penalty is charged, which may forfeit some interest
Early CD withdrawals typically incur a penalty of forfeited interest, the amount depending on the CD term and bank policy.
Question 6: A teller notices a customer is making their third $3,000 cash deposit this week. What concern does this raise?
- Over-limit deposit
- Structuring (smurfing) (Correct answer)
- Account velocity error
- Duplicate transaction
Correct answer: Structuring (smurfing)
Structuring is the act of breaking up large transactions to stay below the $10,000 CTR reporting threshold, which is illegal under the BSA.
Question 7: Which account feature allows a customer to automatically transfer funds from savings to checking to cover overdrafts?
- Sweep account
- Overdraft protection transfer (Correct answer)
- Line of credit
- Money market privilege
Correct answer: Overdraft protection transfer
An overdraft protection transfer automatically moves funds from a linked savings account to cover a checking account shortfall.
Banking Deposit Operations 2
A customer wants to add a joint owner to an existing savings account.
What documentation is typically required from the new joint owner?