Banking Deposit Operations 3 — Questions and Answers
Question 1: A customer presents a check made payable to 'John or Jane Smith.' Who may endorse and deposit this check?
- Only John Smith
- Only Jane Smith
- Either John or Jane Smith alone (Correct answer)
- Both John and Jane must endorse it together
Correct answer: Either John or Jane Smith alone
When a check uses 'or' between payees, either party may independently endorse and deposit the check.
Question 2: What is a 'stale-dated' check?
- A check written more than 6 months ago (Correct answer)
- A check with an incorrect date
- A check that has been altered
- A check without a date
Correct answer: A check written more than 6 months ago
A stale-dated check is generally one more than 6 months (180 days) old, and banks are not obligated to honor it.
Question 3: Which FDIC insurance category covers an individual's single-ownership accounts at the same bank?
- Joint account ownership
- Single account ownership (Correct answer)
- Retirement account category
- Revocable trust account
Correct answer: Single account ownership
All single-ownership accounts held by one person at the same bank are aggregated under the single account ownership category, insured up to $250,000.
Question 4: A customer wants to open a money market deposit account (MMDA). Which feature distinguishes it from a regular savings account?
- It offers no interest
- It may require a higher minimum balance and allows limited check-writing (Correct answer)
- It is not FDIC insured
- It has no withdrawal limits
Correct answer: It may require a higher minimum balance and allows limited check-writing
MMDAs typically require higher minimum balances than regular savings accounts and allow a limited number of checks or transfers per cycle.
Question 5: What is the purpose of a signature card in deposit operations?
- To record the account's opening balance
- To authorize individuals who may transact on the account (Correct answer)
- To set the interest rate on the account
- To document the beneficiary designation
Correct answer: To authorize individuals who may transact on the account
A signature card is a legal document that identifies authorized signers and governs who may conduct transactions on the account.
Question 6: Under Regulation D, how many convenient withdrawals or transfers were traditionally allowed per month from a savings account?
- 3
- 6 (Correct answer)
- 10
- Unlimited
Correct answer: 6
Regulation D historically capped savings account transfers at 6 per month, though the Fed suspended this limit in 2020; many banks still enforce it.
Question 7: A customer receives a cashier's check from a stranger and asks to deposit it and wire the difference after a 'partial refund.' What is this likely?
- A legitimate business transaction
- An overpayment scam (Correct answer)
- A structuring scheme
- A chargeback fraud
Correct answer: An overpayment scam
Overpayment scams involve fraudulent checks; the customer wires real money before the fake check bounces, resulting in a loss.
Banking Deposit Operations 3
A customer presents a check made payable to 'John or Jane Smith.' Who may endorse and deposit this check?