Account Opening and Maintenance Flashcards

Under the Bank Secrecy Act's Customer Identification Program (CIP), which document must a bank collect when opening a new individual account?

Answer: Name, date of birth, address, and identification number (e.g., SSN or TIN)

CIP regulations require banks to collect at minimum the customer's name, date of birth, address, and an identification number before opening an account.

What is the primary purpose of a signature card in banking?

Answer: To provide a record of authorized signers for verifying transactions on the account

A signature card records the signatures of account holders and authorized signers, allowing bank staff to verify the authenticity of checks and withdrawal requests.

A joint account with 'right of survivorship' means:

Answer: The surviving account holder automatically inherits the full account upon the other's death

Right of survivorship (JTWROS) means when one joint owner dies, their share passes automatically to the surviving owner(s) without going through probate.

What does 'FDIC insurance' cover per depositor per insured bank?

Answer: Up to $250,000 per depositor per ownership category per insured bank

The FDIC insures deposits up to $250,000 per depositor, per insured bank, per account ownership category (e.g., individual, joint, retirement).

Which account type is typically used for business transactions and earns little or no interest?

Answer: Commercial checking account

Commercial checking accounts are designed for business day-to-day transactions and typically offer unlimited transactions but little to no interest on balances.

When a customer requests to add an authorized signer to their account, what must the teller typically verify?

Answer: The account owner's identity and obtain proper authorization/signature from the account owner

Adding an authorized signer requires verification of the account owner's identity and their written authorization, as this change affects account access and security.