Retail Banking Products Flashcards
7 cards from real CBP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Retail Banking Products flashcards as text
A customer wants a deposit account that earns interest but also allows unlimited check-writing. Which product best fits this need?
Answer: Negotiable Order of Withdrawal (NOW) account
A NOW account is an interest-bearing checking account that allows unlimited check-writing, unlike savings accounts which have transfer restrictions.
Which of the following is a key characteristic of a jumbo certificate of deposit?
Answer: It carries a minimum deposit of $100,000 and typically offers a higher interest rate
Jumbo CDs require a minimum deposit of $100,000 and usually offer higher yields in exchange for that larger commitment.
A bank offers a mortgage where the interest rate is fixed for 5 years and then adjusts annually. This is best described as a:
Answer: 5/1 adjustable-rate mortgage (ARM)
A 5/1 ARM has a fixed rate for the first 5 years and then resets annually based on a benchmark index.
Under Regulation D, how many convenient transfers or withdrawals per month is a savings account traditionally limited to?
Answer: 6
Regulation D historically limited savings accounts to 6 convenient transfers per month, though the Fed suspended this limit in 2020.
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:
Answer: Overdraft protection
Overdraft protection allows transactions to clear even when the account has insufficient funds, in exchange for a fee or linked account transfer.
Which retail lending product typically uses the borrower's home equity as collateral and provides a revolving line of credit?
Answer: Home Equity Line of Credit (HELOC)
A HELOC is a revolving credit line secured by the borrower's home equity, allowing draws up to a set limit during the draw period.
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:
Answer: Sweep account
A sweep account automatically transfers balances above a set threshold into a higher-yielding vehicle at end of business each day.