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

A NOW account is an interest-bearing checking account that allows unlimited check-writing, unlike savings accounts which have transfer restrictions.

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

Jumbo CDs require a minimum deposit of $100,000 and usually offer higher yields in exchange for that larger commitment.

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

A 5/1 ARM has a fixed rate for the first 5 years and then resets annually based on a benchmark index.

Question 4

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

Accepted Answer

6

Answer

Regulation D historically limited savings accounts to 6 convenient transfers per month, though the Fed suspended this limit in 2020.

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

Overdraft protection allows transactions to clear even when the account has insufficient funds, in exchange for a fee or linked account transfer.

(CBP) Certified Banking Professional Practice Test

(CBP) Certified Banking Professional Practice Test

CBP Retail Banking Products 2