CBP Retail Banking Products 2

Question 1

A customer wants a deposit account that earns interest but also allows unlimited check-writing. Which product best fits this need?

Accepted Answer

Negotiable Order of Withdrawal (NOW) account

Answer

Standard savings account

Answer

Money market deposit account

Answer

Certificate of deposit

Question 2

Which of the following is a key characteristic of a jumbo certificate of deposit?

Accepted Answer

It carries a minimum deposit of $100,000 and typically offers a higher interest rate

Answer

It is insured up to $500,000 by the FDIC

Answer

It permits partial withdrawals without penalty

Answer

It must mature within 30 days of issuance

Question 3

A bank offers a mortgage where the interest rate is fixed for 5 years and then adjusts annually. This is best described as a:

Accepted Answer

5/1 adjustable-rate mortgage (ARM)

Answer

Balloon mortgage

Answer

Interest-only mortgage

Answer

Fixed-rate mortgage

Question 4

Under Regulation D, how many convenient transfers or withdrawals per month is a savings account traditionally limited to?

Accepted Answer

6

Answer

3

Answer

12

Answer

Unlimited

Question 5

A retail bank customer uses their debit card to make a purchase that exceeds their checking account balance. The bank covers the shortfall and charges a fee. This service is called:

Accepted Answer

Overdraft protection

Answer

Stop-payment order

Answer

Float management

Answer

Chargeback service

Question 6

Which retail lending product typically uses the borrower's home equity as collateral and provides a revolving line of credit?

Accepted Answer

Home Equity Line of Credit (HELOC)

Answer

FHA loan

Answer

Unsecured personal line of credit

Answer

Auto loan

Question 7

A bank's retail product that allows customers to automatically move excess funds from a checking account into an interest-bearing account each night is called a:

Accepted Answer

Sweep account

Answer

Zero-balance account

Answer

Linked savings account

Answer

Money market mutual fund