Banking Deposit Operations 5

Question 1

Which federal agency directly supervises and insures deposits at state-chartered banks that are NOT members of the Federal Reserve System?

Accepted Answer

Federal Deposit Insurance Corporation (FDIC)

Answer

The FDIC is the primary federal supervisor for state-chartered non-member banks and also provides deposit insurance for all insured institutions.

Question 2

A customer opens a revocable trust account naming four beneficiaries. What is the maximum FDIC coverage for this account?

Accepted Answer

$1,000,000

Answer

Revocable trust accounts are insured up to $250,000 per eligible beneficiary, so four beneficiaries = $1,000,000 total coverage.

Question 3

What is the key difference between a demand deposit account and a time deposit account?

Accepted Answer

Demand deposits allow withdrawal at any time; time deposits have a fixed term

Answer

Demand deposits (checking accounts) allow immediate withdrawal on demand, while time deposits (CDs) lock funds for a specified term.

Question 4

A customer asks why her available balance is lower than her account balance. The most likely reason is:

Accepted Answer

A recent deposit is under a hold per Regulation CC

Answer

Regulation CC allows banks to place holds on deposits, making the deposited amount unavailable until the hold expires.

Question 5

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?

Accepted Answer

Cashier's check

Answer

A cashier's check is issued by and drawn on the bank's own funds, making the bank directly liable for payment.

Banking Practice Test