CBT Account Opening and Maintenance 3

Question 1

What is the main difference between a traditional savings account and a money market account?

Accepted Answer

Money market accounts typically offer higher interest rates and limited check-writing privileges

Answer

Savings accounts are FDIC-insured while money market accounts are not

Answer

Traditional savings accounts have no withdrawal limits while money market accounts do

Answer

Money market accounts are only available to business customers

Question 2

A certificate of deposit (CD) differs from a regular savings account in that:

Accepted Answer

CDs require funds to be held for a fixed term and impose early withdrawal penalties

Answer

CDs are not FDIC-insured

Answer

CDs allow unlimited withdrawals at any time

Answer

CDs pay interest only upon maturity and nothing before

Question 3

What does it mean when a bank account has an 'overdraft protection' feature linked to a savings account?

Accepted Answer

Funds are automatically transferred from the linked savings account to cover a checking account shortfall

Answer

The bank waives all overdraft fees indefinitely

Answer

The account is immune from NSF fees regardless of balance

Answer

The bank extends a line of credit equal to the account balance

Question 4

When a customer wants to change the primary address on their account, what should the teller require?

Accepted Answer

Verification of the customer's identity before making any changes to account information

Answer

A written request submitted only by mail

Answer

A fee payment before processing address changes

Answer

Approval from a bank officer for all address changes

Question 5

Which IRS form do banks use to report interest income of $10 or more paid to a customer in a calendar year?

Accepted Answer

Form 1099-INT

Answer

Form W-2

Answer

Form 1040

Answer

Form W-9

Question 6

What is a 'backup withholding' situation in a bank account context?

Accepted Answer

The IRS requires the bank to withhold 24% of interest and dividend payments when a customer fails to provide a correct TIN

Answer

The bank withholds funds pending fraud investigation

Answer

A hold placed on funds deposited via check

Answer

A fee withheld for account maintenance