CBT Account Opening and Maintenance 1 — Questions and Answers
Question 1: Under the Bank Secrecy Act's Customer Identification Program (CIP), which document must a bank collect when opening a new individual account?
- Social Security card only
- Name, date of birth, address, and identification number (e.g., SSN or TIN) (Correct answer)
- Employer information and salary details
- Credit score and financial statements
Correct 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.
Question 2: What is the primary purpose of a signature card in banking?
- To authorize loan applications
- To provide a record of authorized signers for verifying transactions on the account (Correct answer)
- To track the customer's transaction history
- To certify the customer's credit worthiness
Correct 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.
Question 3: A joint account with 'right of survivorship' means:
- Both account holders must sign all transactions
- The surviving account holder automatically inherits the full account upon the other's death (Correct answer)
- The account is insured at double the FDIC limit
- The account requires probate before funds can be distributed
Correct 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.
Question 4: What does 'FDIC insurance' cover per depositor per insured bank?
- Up to $100,000 per account
- Up to $250,000 per depositor per ownership category per insured bank (Correct answer)
- All deposits regardless of amount
- Up to $500,000 for joint accounts only
Correct 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).
Question 5: Which account type is typically used for business transactions and earns little or no interest?
- Money market account
- Certificate of deposit
- Commercial checking account (Correct answer)
- Savings account
Correct 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.
Question 6: When a customer requests to add an authorized signer to their account, what must the teller typically verify?
- The new signer's credit score
- The account owner's identity and obtain proper authorization/signature from the account owner (Correct answer)
- The new signer's employment status
- The new signer's relationship to the account owner
Correct 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.
CBT Account Opening and Maintenance 1
Under the Bank Secrecy Act's Customer Identification Program (CIP), which document must a bank collect when opening a new individual account?