Banking Deposit Operations 4

Question 1

What does the term 'float' refer to in the context of deposit operations?

Accepted Answer

Funds that have been deposited but not yet cleared

Answer

Float refers to the period between when a deposit is credited to an account and when the funds actually clear through the banking system.

Question 2

A 'POD' designation on a deposit account stands for:

Accepted Answer

Payable on Death

Answer

POD (Payable on Death) designates a beneficiary who receives the account funds upon the account holder's death, bypassing probate.

Question 3

Which document legally authorizes a third party to transact on a customer's account while the customer is alive?

Accepted Answer

A power of attorney

Answer

A power of attorney grants a designated agent the legal authority to conduct transactions on behalf of the account owner.

Question 4

A customer's savings account is classified as 'dormant.' What typically triggers this status?

Accepted Answer

No customer-initiated activity for a defined period (e.g., 1–5 years)

Answer

Accounts become dormant after a period of inactivity defined by state law, after which unclaimed funds may be escheated to the state.

Question 5

What is the primary purpose of the Bank Secrecy Act (BSA) as it relates to deposit operations?

Accepted Answer

To help detect and prevent money laundering and financial crimes

Answer

The BSA requires financial institutions to maintain records and file reports to help detect money laundering, tax evasion, and other financial crimes.

Banking Practice Test

Banking Practice Test

Banking Deposit Operations 4