Banking Deposit Operations 3

Question 1

A customer presents a check made payable to 'John or Jane Smith.' Who may endorse and deposit this check?

Accepted Answer

Either John or Jane Smith alone

Answer

When a check uses 'or' between payees, either party may independently endorse and deposit the check.

Question 2

What is a 'stale-dated' check?

Accepted Answer

A check written more than 6 months ago

Answer

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?

Accepted Answer

Single account ownership

Answer

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?

Accepted Answer

It may require a higher minimum balance and allows limited check-writing

Answer

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?

Accepted Answer

To authorize individuals who may transact on the account

Answer

A signature card is a legal document that identifies authorized signers and governs who may conduct transactions on the account.

Banking Practice Test