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 opens a joint checking account with right of survivorship. If one account holder dies, what happens to the funds?
Answer: The surviving account holder automatically owns the entire balance
With right of survivorship, the surviving joint owner immediately inherits full ownership of the account balance outside of probate.
Which type of retail deposit account allows customers to deposit funds at any time but restricts withdrawals to a fixed future date?
Answer: Certificate of deposit (CD)
A CD accepts a lump-sum deposit and locks funds until the stated maturity date, imposing early-withdrawal penalties if funds are accessed sooner.
A bank advertises an annual percentage yield (APY) of 4.08% on a savings account. The nominal annual rate is 4%. What does the difference reflect?
Answer: The effect of compounding interest more frequently than once per year
APY accounts for compounding within the year, so it always equals or exceeds the nominal rate when compounding occurs more than once annually.
Under the Truth in Lending Act (TILA), what must a lender disclose to a consumer credit applicant before consummation of a loan?
Answer: The annual percentage rate (APR), finance charge, amount financed, and total of payments
TILA requires lenders to clearly disclose the APR, total finance charges, amount financed, and total repayment amount so borrowers can compare credit offers.
A bank customer wants to protect against identity theft by preventing new credit inquiries from appearing on their credit report. What tool should they use?
Answer: Credit freeze (security freeze)
A credit freeze blocks lenders from accessing the credit report, effectively preventing new accounts from being opened in the consumer's name without their consent.
Which federal regulation governs the disclosure of terms and fees for consumer deposit accounts, including savings and checking accounts?
Answer: Regulation DD (Truth in Savings Act)
Regulation DD implements the Truth in Savings Act and requires banks to disclose interest rates, fees, and terms on consumer deposit accounts.
A retail bank offers a 'secured credit card' to a customer with a poor credit history. What distinguishes this product from a standard credit card?
Answer: The customer deposits cash collateral that sets the credit limit
A secured credit card requires the customer to deposit funds as collateral, reducing lender risk and making credit accessible to those rebuilding their credit history.